UK’s CMA blocks Microsoft Activision Blizzard acquisition

The duo plan to appeal.

The UK’s Competition and Markets Authority (CMA) has blocked Microsoft’s planned acquisition of Activision Blizzard largely based on a potential monopoly centered on cloud gaming.

“The CMA has prevented Microsoft’s proposed purchase of Activision over concerns the deal would alter the future of the fast-growing cloud gaming market, leading to reduced innovation and less choice for UK gamers over the years to come,” the CMA said in a statement.

“Microsoft has a strong position in cloud gaming services and the evidence available to the CMA showed that Microsoft would find it commercially beneficial to make Activision’s games exclusive to its own cloud gaming service,” it continued.

Microsoft and Activision Blizzard appear to be ready to appeal the decision.

“We remain fully committed to this acquisition and will appeal,” said Microsoft President, Brad Smith.

“The CMA’s decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the United Kingdom,” Smith continued. “We have already signed contracts to make Activision Blizzard’s popular games available on 150 million more devices, and we remain committed to reinforcing these agreements through regulatory remedies. We’re especially disappointed that after lengthy deliberations, this decision appears to reflect a flawed understanding of this market and the way the relevant cloud technology actually works.”

The CMA’s decision was expected to favour the acquisition; Microsoft had offered many concessions including Call of Duty parity on Nintendo platforms and the availability of Microsoft’s library on NVidia GeForce Now — but not cloud gaming — ahead of the CMA’s deliberation.

A decision from the USA’s FTC is expected soon; we’ll keep you informed as more is known.