UK watchdog blocks Microsoft's $69 billion acquisition of Call of Duty maker Activision Blizzard

Microsoft's $69 billion acquisition to buy Activision Blizzard - a video game company has been blocked in the United Kingdom by the Competition and Markets Authority. After months of investigation, the antitrust watchdog concluded that the deal would harm competition in cloud gaming.

"The deal could alter the future of the fast-growing cloud gaming market, leading to reduced innovation and less choice for UK gamers over the years to come,” stated the CMA after analysing more than three million Microsoft and Activision documents and over 2,100 emails from the public.

Martin Coleman, the chair of the panel conducting the investigation added that Microsoft could seriously undermine the competitors if the deal went through.

“Microsoft already enjoys a powerful position and head start over other competitors in cloud gaming and this deal would strengthen that advantage giving it the ability to undermine new and innovative competitors,” said Coleman.

Microsoft to appeal the decision

Meanwhile, Microsoft said it will appeal the decision but it is a body blow to the tech behemoth which had been looking to close the deal as soon as possible.

"We're especially disappointed that after lengthy deliberations, this decision appears to reflect a flawed understanding of this market and the way the relevant cloud technology actually works," said Brad Smith, vice chairman and president of Microsoft.

Activision also showed disappointment over the ruling and said the UK was 'closed for business'.

"The CMA's report contradicts the ambitions of the UK to become an attractive country to build technology businesses," said a company spokesperson.

"The report's conclusions are a disservice to UK citizens, who face increasingly dire economic prospects. We will reassess our growth plans for the UK. Global innovators large and small will take note that - despite all its rhetoric - the UK is clearly closed for business."

CMA has long argued that the takeover of the ever-popular 'Call of Duty' maker could hurt competition in gaming consoles, subscription services and cloud gaming in case Microsoft denies giving competitors access to Activision's best-selling games.

The deal, if it is to go through, has to be approved by the regulatory bodies in the UK, the United States and the European Union. If CMA continues to block the deal, it appears highly unlikely the two regulators would move the needle in another direction.

(With inputs from agencies)

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