UK Watchdog Tightens Grip on Microsoft and Activision Blizzard with New Restrictions

Following its decision to block Microsoft's proposed acquisition of Activision Blizzard last month, the UK's Competition and Markets Authority has introduced additional constraints on both companies. An interim order issued by the regulator outlines new rules that prohibit Microsoft and Activision Blizzard from acquiring a stake in each other without prior written consent. This includes investing in each other's development studios, acquiring interests in businesses that hold stakes in the other company, or holding options to acquire such interests. The CMA has implemented these restrictions to prevent either company from taking pre-emptive action. The regulator previously rejected the $68.7 billion acquisition due to concerns about Microsoft's potential dominance in the cloud gaming market. Microsoft has announced plans to appeal the decision, with all parties preparing their cases for the Competition Appeal Tribunal. Although the deal has been approved in several other markets, including Japan, South Africa, and Ukraine, Microsoft and Activision Blizzard must still secure approval from regulators in the US, UK, and Europe. The US Federal Trade Commission has issued a legal complaint, with a court hearing scheduled for August, while the EU has issued a formal anti-trust warning and is expected to make a final decision by May 22.