FILE - The Activision Blizzard Booth during the Electronic Entertainment Expo in Los Angeles, June 13, 2013. Activision Blizzard agreed, Friday, Feb. 3, 2023 to pay a $35 million fine to settle federal regulatory charges that it failed to collect and respond to employee complaints of workplace misconduct and violated a federal whistleblower protection rule. (AP Photo/Jae C. Hong, File)
LONDON (AP) – Microsoft’s stalled $68.7 billion deal to buy video game company Activision Blizzard has hit a fresh hurdle in the United Kingdom, where the antitrust watchdog said Wednesday that it will stifle competition and hurt gamers.
Britain’s Competition and Markets Authority said its in-depth investigation found that the deal could strengthen Microsoft’s position in the growing cloud gaming market, “harming U.K. gamers who cannot afford expensive consoles.”
The blockbuster deal also could hurt British gamers by “weakening the important rivalry” between Microsoft’s Xbox console and Sony’s rival PlayStation machines, the watchdog said in a provisional report.
The all-cash deal, which is set to be the largest in the history of the tech industry, is facing opposition from Sony and pushback from regulators in the U.S. and Europe because it would give Microsoft control of popular game franchises such as Call of Duty, World of Warcraft and Candy Crush.
Microsoft’s deputy general counsel, Rima Alaily, said the company is “committed to offering effective”¯and”¯easily”¯enforceable solutions”¯that address the CMA’s concerns.”
The U.K. antitrust investigation is now set to drag on for a few more months. The regulator said it will now seek feedback, including possible options to address its competition concerns, from interested parties for its final report due April 26.
The move dashes Microsoft’s hopes that a speedy favorable outcome could help it resolve a lawsuit brought by the U.S. Federal Trade Commission.
The FTC has sought to block the deal, arguing that the merger could violate antitrust laws by suppressing competitors to the Xbox game console and its growing game subscription business.
Microsoft told the FTC’s administrative judge in January that it was working to resolve the U.K. investigation, as well as a separate probe in the European Union, and hoped to bring back proposed remedies to U.S. regulators.
The Activision Blizzard deal is one of several regulatory hassles for Microsoft in Europe, amid expanded scrutiny for Big Tech companies on both sides of the Atlantic over worries that they have become too dominant.
