The ruling will reverberate worldwide
The $69bn acquisition, which would have been Microsoft’s largest and one of tech’s biggest ever, had seemed on track. The European Commission was expected to give it the nod next month. America’s Federal Trade Commission had objected, but faced a difficult battle in court to stop it. Britain had long been seen as the hardest of the big three regulators to convince.
The cloud-gaming market is indeed new and fast-changing, which makes it an odd place to wield the regulatory sledgehammer. Cloud-streaming subscriptions accounted for less than 1% of games spending last year, and it is far from certain that the technology will take off. Google shut down its Stadia cloud service in January and Amazon’s similar Luna platform is unpopular. Even if Microsoft bucked the trend, it would be good for consumers.
Microsoft and Activision will appeal. Yet Britain’s appeals tribunal focuses narrowly on process and tends to defer to the. Microsoft’s only other options are to break off a smaller chunk of Activision or carve Britain out of the global deal, both things it has previously indicated it will not do. Without a deal Microsoft’s future in gaming is in question, says Ben Thompson of the Stratechery newsletter.
Yet Britain’s new global clout may backfire. WhatsApp and others have threatened to exit the country rather than impose its encryption rules worldwide. Activision, whose share price fell by a tenth on the ruling, says it will reassess British plans, adding: “Global innovators large and small will take note that—despite all its rhetoric—the
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