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UK blocks Microsoft takeover of Activision Blizzard

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London (CNN) UK antitrust regulators I was blocked Microsoft’s $69 billion acquisition of Activision Blizzard is a major breakthrough in the tech industry. biggest deal This is because there are concerns that it will hinder competition in cloud gaming.

The Office of Competitive Markets says: statement On Wednesday, it said it feared the deal would lead to “less innovation and less choice for UK gamers in the years to come”.

Acquisition microsoft (MSFTMore) The regulator added that it is “even stronger” in the cloud gaming market, which already holds a 60% to 70% share globally.

Activision Blizzard is one of the world’s largest video game developers, producing games such as Call of Duty, World of Warcraft, Diablo and Overwatch. Microsoft, which sells Xbox game consoles, offers a video game subscription service called Xbox Game Pass and a cloud-based video game streaming service.

Transactions that combine businesses face increasing opposition from antitrust regulators around the world. In December, the US Federal Trade Commission sued to block a takeover Regarding similar competitive concerns. A public hearing is scheduled for August.European Union too Transaction evaluation

Microsoft may try to push up the cost of Game Pass subscriptions by dedicating Activision games to its platform, the Competition and Markets Authority said.

“The cloud will eliminate the need for UK gamers to buy expensive gaming consoles and PCs, giving them a lot more flexibility and choice in how they play. “To allow them to occupy positions would be to take risks that would undermine the innovation that is essential to the development of these opportunities,” he added.

“Available evidence … indicates that, barring a merger, Activision will begin offering games via its cloud platform in the near future.”

Microsoft, Activision to appeal

Both companies plan to appeal this decision. Activision Blizzard CEO Bobby Kotick said in a statement: “Together with Microsoft, we are able to appeal this decision, and we have already begun work to appeal to the UK Competition Court of Appeals.

“This decision appears to reflect a misunderstanding of the market and how related cloud technologies actually work,” added Brad Smith, president of Microsoft.

The Office of Competitive Markets, which began a detailed review of the blockbuster contract in September, said Microsoft’s proposed remedy for its concerns had “significant shortcomings.”

“Their proposal… would have replaced competition with ineffective regulation in a new and dynamic market,” explained Martin Coleman, chair of the independent panel of experts conducting the investigation.

“Microsoft already has a strong position and head start in cloud gaming compared to other competitors. ‘, continued Coleman. “Cloud gaming requires a free and competitive marketplace that drives innovation and choice.”

The UK cloud gaming market is expected to reach up to £1 billion ($1.2 billion) by 2026, representing around 9% of the global market.

— Josh du Lac and Brian Fung contributed to the report.

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