Activision Blizzard, Microsoft Speak Out as UK Blocks $69 Billion Acquisition Deal

Activision Blizzard and Microsoft speak out over UK regulator's decision to block $69 billion acquisition deal
The UK's Competition and Markets Authority said it was concerned that the deal would result in fewer options for gamers
The tech giant and the gaming company have announced plans to appeal the decision

Activision Blizzard and Microsoft have spoken out over a United Kingdom regulator's blocking of a $69 billion acquisition deal that would allow the tech giant to gain the rights for the game company's various popular titles.

The UK's Competition Markets Authority blocked the massive deal because it claimed that there was concern it would offer reduced innovation and less choice for gamers. However, the two companies involved in the deal have criticized the decision and announced plans to appeal.

UK Regulator Blocks Massive $69 Billion Acquisition Deal

In a statement, a spokesperson for Activision said that the CMA's report contradicted the UK's ambitions to become an attractive country to further build technology businesses, as per BBC.

They added that they would continue working aggressively with the tech giant to reverse the decision with an appeal. Activision noted that the report's conclusion only provides a disservice to citizens in the UK who are currently facing dire economic prospects. The company said it will reassess its growth plans for the region.

Microsoft's vice chairman and president, Brad Smith, said that the tech giant is still committed to completing the acquisition. He noted that the CMA's decision only rejected a pragmatic path in addressing competition concerns. He argued that it discourages technology innovation and investment in the region.

Smith noted that Microsoft had already signed several contracts to make Activision Blizzard's games available on 150 million additional devices. He said that despite lengthy deliberations, the CMA chose an option that reflects a flawed understanding of the market and how relevant cloud technology works in reality.

Agreement Between Activision Blizzard and Microsoft

The CMA's decision also bolsters an effort by the Federal Trade Commission (FTC) to block the massive deal in the US. It was seen as a victory for proponents of regulating tech giants such as Microsoft, Amazon, Apple, Google, and Meta, according to the New York Times.

The efforts were part of a broader attempt to curb tech giants' influence amid concern that they wield too much power over online commerce and communications. However, court losses and legislative failures have recently stymied these efforts.

A former chairman of the FTC, William E. Kovacic, said that blocking the deal between Activision Blizzard and Microsoft is a "big win" in the effort to realign antitrust enforcement. The CMA's decision focused on the cloud gaming aspect of the deal, which allows people to stream games and removes the need to use hardware such as gaming consoles.

The ruling comes as Activision Blizzard's sales have dropped by more than 8% in early US trading, and Microsoft shares have gone up by 7%. However, the latter was primarily due to the tech giant's strong earnings report on Tuesday, said CNBC.