The UK antitrust regulator has blocked Microsoft’s purchase of Activision Blizzard, threatening to thwart one of the tech industry’s biggest deals over concerns it will stifle competition in cloud gaming.
The Competition and Markets Authority said in a statement Wednesday that it was worried the deal would lead to “reduced innovation and less choice for UK gamers over the years to come.”
The acquisition, which was worth $69 billion when it was announced early last year, would make Microsoft (MSFT) “even stronger” in cloud gaming, a market in which it already holds a 60%-70% share globally, the regulator added.
Activision’s share price plunged more than 11% on Wednesday, while Microsoft’s stock gained 8%.
Activision Blizzard (ATVI) is one of the world’s biggest video game developers, producing games such as “Call of Duty,” “World of Warcraft,” “Diablo” and “Overwatch.” Microsoft, which sells the Xbox gaming console, offers a video game subscription service called Xbox Game Pass, as well as a cloud-based video game streaming service.
The deal to combine the businesses has been met with growing opposition by antitrust regulators worldwide. In December, the US Federal Trade Commission sued to block the takeover over similar competition concerns. A hearing is scheduled for August. The European Union is also evaluating the transaction.
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