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British authorities prevent Microsoft from acquiring Activision Blizzard

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The UK’s antitrust regulator has blocked Microsoft’s acquisition of video game heavyweight Activision Blizzard, a deal estimated at $69 billion.

The move could deal a fatal blow to one of the biggest tech deals in decades and be a major setback for Microsoft, which has struggled to persuade other regulators to support the deal.

there Competition and Markets Authority (UK Competition and Markets Authority) said that Microsoft has failed to allay fears of its takeover of Activision Blizzard, one of the most popular video game developers in the world (Call of dutyAnd OverwatchAnd World of Warcraft), does not stifle competition in the growing market for “cloud gaming,” or on-demand games.

Cloud gaming allows gamers to access content remotely and without the need to purchase expensive consoles. It is poised to change the gaming industry in the same way that companies like Netflix and Spotify have shaken up the movie and music industries.

there Competition and Markets Authority He said that Microsoft, already a big player in the field, would “find it commercially advantageous to make Activision games exclusive to its cloud gaming service” and thus strengthen its position.

The UK regulator added that allowing the company to “occupy such a strong position” as the sector takes off “would risk undermining innovation,” noting that the deal “would change the future of rapidly growing cloud gaming” leading to fewer choices for consumers.

Microsoft, which has submitted proposals to address the regulator’s concerns, criticized the decision. Brad SmithThe Microsoft chief said the move rejects “a pragmatic way to address competition concerns” and reflects “a poor understanding of this market.”

In an email to employees, Bobby Kotick, the CEO of Activision Blizzard, said the UK regulator’s decision was “far from the last word on this deal”. He said the company can and will challenge the decision, adding that steps have already been taken to do so. “We are confident in our case because the facts are on our side: This deal is good for the competition,” said Bobby Kotick. If the decision is upheld, he believes it would “stifle investment, competition and job creation across the UK gambling industry”.

Microsoft has announced its intention to acquire Activision Blizzard for approx $69 billion in early 2022. The move, which would have been the biggest Xbox maker ever to consolidate its position in the gaming field, has been criticized by Microsoft’s gaming competitors, including PlayStation maker Sony, which fears it will deprive users of Its content platform like Call of duty. Other regulatory authorities, incl Federal Trade Commission (The Federal Trade Commission) in the US is also examining the transaction closely and has not yet given the green light. This means that Microsoft still has hurdles to overcome if it can overturn a decision Competition and Markets Authority.

Translated article from the American magazine Forbes Author: Robert Hart

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