British regulatory body, The Competition and Markets Authority, said about the Microsoft-Activision deal in a report, that ‘the only effective remedy’ to the significant loss of competition that the deal would result in ‘is to prohibit the Merger.’
The all-cash deal was set to be the biggest in the history of the tech industry.
The deal faces stiff opposition from rival console maker Sony and is also being scrutinized by US and European regulators over fears that it would give Microsoft control of superstar products such as ‘Call of Duty.’
Microsoft said it was disappointed over the development.
‘We remain fully committed to this acquisition and will appeal,’ President Brad Smith said in a statement.
Mr Smith said the regulator’s decision ‘rejects a pragmatic path to address competition concerns’ and ‘discourages tech innovation and investment in the United Kingdom.’
‘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,’ Smith added.
Activision also released a statement saying it would ‘work aggressively with Microsoft to reverse this on appeal.’