Britain blocks Microsoft’s $69 billion acquisition of Activision Blizzard
LONDON — Britain’s top competition regulator on Wednesday moved to block Microsoft‘s acquisition of video game publisher Activision Blizzard.
The measure marks a major blow for the U.S. tech giant, as it seeks to convince authorities that the deal will benefit competition. Microsoft said it plans to appeal the decision.
Shares of Activision Blizzard slumped more than 8% in early U.S. trading. Microsoft shares were up 7% but this was largely linked to the company’s strong earnings report Tuesday.
The U.K. Competition and Markets Authority said it opposed the deal as it raises competition concerns in the nascent cloud gaming market. The CMA previously held concerns about competition in games consoles being undermined but ruled out this concern in a preliminary decision in March.
Microsoft could make Activision’s games exclusive to its cloud gaming platform, Xbox Game Pass, cutting off distribution to other key industry players, the CMA said.
Cloud gaming is a technology that enables gamers to access games via companies’ remote servers — effectively streaming a game like you would a movie on Netflix. The technology is still in its infancy, but Microsoft is betting big on it becoming a mainstream way of playing games.
“Allowing Microsoft to take such a strong position in the cloud gaming market just as it begins to grow rapidly would risk undermining the innovation that is crucial to the development of these opportunities,” the CMA said in a press release Wednesday.
Microsoft offered the CMA remedies in an attempt to resolve its concerns — including “requirements governing what games must be offered by Microsoft to what platforms and on what conditions over a ten-year period.” However, the regulator rejected the proposals.
“Given the remedy applies only to a defined set of Activision games, which can be streamed only in a defined set of cloud gaming services, provided they are purchased in a defined set of online stores, there are significant risks of disagreement and conflict between Microsoft and cloud gaming service providers, particularly over a ten-year period in a rapidly changing market,” the CMA said.
‘Flawed understanding of this market’
Microsoft Vice Chair and President Brad Smith said in a statement that the company remains “fully committed to this acquisition and will appeal.”
“The CMA’s decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the United Kingdom,” Smith said Wednesday.
“We have already signed contracts to make Activision Blizzard’s popular games available on 150 million more devices, and we remain committed to reinforcing these agreements through regulatory remedies. 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.”
Bobby Kotick, CEO of Activision Blizzard, told employees in a letter Wednesday that the company and Microsoft have “already begun the work to appeal to the UK Competition Appeals Tribunal.”
“We’re confident in our case because the facts are on our side: this deal is good for competition,” he said.
“At a time when the fields of machine learning and artificial intelligence are thriving, we know the U.K. market would benefit from Microsoft’s bench strength in both domains, as well as our ability to put those technologies to use immediately,” Kotick added. “By contrast, if the CMA’s decision holds, it would stifle investment, competition, and job creation throughout the UK gaming industry.”
An Activision Blizzard spokesperson said the CMA’s decision represented “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,” the spokesperson said.
Microsoft announced its intention to acquire Activision Blizzard in January 2022 for $69 billion, in one of the biggest deals the video game industry has seen to date.
Executives at the Redmond, Washington-based technology giant believe the acquisition will boost its efforts in gaming by adding lucrative franchises like Call of Duty and Candy Crush Saga to its content offerings.
However, some of Microsoft’s competitors contested the deal, concerned it may give Microsoft a tight grip on the $200 billion games market. Of particular concern was the prospect that Microsoft may shut off distribution access to Activision’s popular Call of Duty franchise for certain platforms.
Sony, in particular, has voiced concern with Microsoft’s Activision purchase. The Japanese gaming giant fears that Microsoft could make Call of Duty exclusive to its Xbox consoles in the long run.
Microsoft sought to allay those concerns by offering Sony, Nintendo, Nvidia and other firms 10-year agreements to continue bringing Call of Duty to their respective gaming platforms.
Microsoft contends it wouldn’t be financially beneficial to withhold Call of Duty from PlayStation, Nintendo and other rivals given the licensing income it generates from keeping the game available on their platforms.
Microsoft’s Smith told CNBC last month that the company is offering Sony the same agreement as it did Nintendo — to make Call of Duty available on PlayStation at the same time as on Xbox, with the same features. Sony still opposes the deal.
The CMA had raised concerns with the potential for Microsoft to hinder competition in the nascent cloud gaming market via its Xbox Game Pass subscription service, which offers cloud gaming among its perks. Microsoft has committed to bring new Call of Duty titles to Xbox Game Pass on day one of its release.
Cloud gaming, or the ability to access games via PC or mobile devices over the internet, is still in its infancy and requires a strong broadband connection to work well. Cloud gaming made up only a fraction of global internet traffic in 2022.
Microsoft still needs to convince other regulators not to block the deal. The EU continues to probe the merger to assess whether it hurts competition, while the U.S. Federal Trade Commission has sued to block the deal on antitrust grounds.
The tablet of the new Tesla Model 3.
Matteo Della Torre | Nurphoto | Getty Images
Tesla is facing a federal investigation into possible safety defects with FSD, its partially automated driving system that is also known as Full Self-Driving (Supervised).
Media, vehicle owner and other incident reports to the National Highway Traffic Safety Administration showed that in 44 separate incidents, Tesla drivers using FSD said the system caused them to run a red light, steer into oncoming traffic or commit other traffic safety violations leading to collisions, including some that injured people.
In a notice posted to the agency’s website on Thursday, NHTSA said the investigation concerns “all Tesla vehicles that have been equipped with FSD (Supervised) or FSD (Beta),” which is an estimated 2,882,566 of the company’s electric cars.
Tesla cars, even with FSD engaged, require a human driver ready to brake or steer at any time.
The NHTSA Office of Defects Investigation opened a Preliminary Evaluation to “assess whether there was prior warning or adequate time for the driver to respond to the unexpected behavior” by Tesla’s FSD, or “to safely supervise the automated driving task,” among other things.
The ODI’s review will also assess “warnings to the driver about the system’s impending behavior; the time given to drivers to respond; the capability of FSD to detect, display to the driver, and respond appropriately to traffic signals; and the capability of FSD to detect and respond to lane markings and wrong-way signage.”
Tesla did not respond to a request for comment on the new federal probe. The company released an updated version of FSD this week, version 14.1, to customers.
For years, Tesla CEO Elon Musk has promised investors that Tesla would someday be able to turn their existing electric vehicles into robotaxis, capable of generating income for owners while they sleep or go on vacation, with a simple software update.
That hasn’t happened yet, and Tesla has since informed owners that future upgrades will require new hardware as well as software releases.
Tesla is testing a Robotaxi-brand ride-hailing service in Texas and elsewhere, but it includes human safety drivers or valets on board who either conduct the drives or manually intervene as needed.
In February this year, Musk and President Donald Trump slashed NHTSA staff as part of a broader effort to reduce the federal workforce, impacting the agency’s ability to investigate vehicle safety and regulate autonomous vehicles, The Washington Post first reported.
Read NHTSA’s Tesla FSD traffic safety violations investigation filings here.
Commander Jared Isaacman of Polaris Dawn, a private human spaceflight mission, speaks at a press conference at the Kennedy Space Center in Cape Canaveral, Florida, U.S. August 19, 2024.
Joe Skipper | Reuters
President Donald Trump has met with Jared Isaacman to discuss another nomination to lead NASA, a source familiar with the talks confirmed to CNBC’s Morgan Brennan.
Isaacman, who has close ties with SpaceX CEO Elon Musk, was at the White House in September for Trump’s dinner for tech power players. Musk did not attend.
Trump and Isaacman have had multiple in-person meetings in recent weeks to talk about the Shift4 founder’s vision for the space program, according to Bloomberg, citing a person familiar with the meetings.
After a fiery back-and-forth between Musk and Trump over government spending, the president pulled Isaacman’s nomination for the post, saying he was a “blue blooded Democrat, who had never contributed to a Republican before.”
“I also thought it inappropriate that a very close friend of Elon, who was in the Space Business, run NASA, when NASA is such a big part of Elon’s corporate life,” Trump wrote in a Truth Social post on June 6.
Trump named Transportation Secretary Sean Duffy interim head of NASA in July.
Isaacman, who declined to comment, was initially nominated in December to lead the space agency.
Isaacman is a seasoned space traveller, having led two private spaceflights with SpaceX in 2021 and 2024. Shift4 has invested $27.5 million in SpaceX, according to a 2021 filing.
Isaacman stepped down as CEO from Shift4, the payments company he founded in 1999 at the age of 16, after his nomination was pulled, and now serves as executive chairman.
“Even knowing the outcome, I would do it all over again,” Isaacman wrote about the NASA nomination process in a letter to investors announcing the Shift4 change.
Now, it looks like he gets to do it all over again.
Tensions between Musk and Trump have cooled in the months since, but big challenges face the U.S. space program..
Trump has proposed cutting more than $6 billion from NASA’s budget.
As a result of Trump’s Department of Government Efficiency initiative, which Musk led in the first half of 2025, around 4,000 NASA employees took deferred resignation program offers, cutting the space agency’s staff of 18,000 by about one-fifth.
During the October government shutdown, NASA has made exceptions that allow employees to keep working on missions involving Musk’s SpaceX and Jeff Bezos’ Blue Origin.
An illustration photo shows Sora 2 logo on a smartphone.
Cfoto | Future Publishing | Getty Images
The Creative Artists Agency on Thursday slammed OpenAI’s new video creation app Sora for posing “significant risks” to their clients and intellectual property.
The talent agency, which represents artists including Doja Cat, Scarlett Johanson, and Tom Hanks, questioned whether OpenAI believed that “humans, writers, artists, actors, directors, producers, musicians, and athletes deserve to be compensated and credited for the work they create.”
“Or does Open AI believe they can just steal it, disregarding global copyright principles and blatantly dismissing creators’ rights, as well as the many people and companies who fund the production, creation, and publication of these humans’ work? In our opinion, the answer to this question is obvious,” the CAA wrote.
OpenAI did not immediately respond to CNBC’s request for comment.
The CAA said that it was “open to hearing” solutions from OpenAI and is working with IP leaders, unions, legislators and global policymakers on the matter.
“Control, permission for use, and compensation is a fundamental right of these workers,” the CAA wrote. “Anything less than the protection of creators and their rights is unacceptable.”
Sora, which launched last week and has quickly reached 1 million downloads, allows users to create AI-generated clips often featuring popular characters and brands.
OpenAI launched with an “opt-out” system, which allowed the use of copyrighted material unless studios or agencies requested that their IP not be used.
CEO Sam Altman later said in a blog post that they would give rightsholders “more granular control over generation of characters.”
Talent agency WME sent a memo to agents on Wednesday that it has “notified OpenAI that all WME clients be opted out of the latest Sora AI update, regardless of whether IP rights holders have opted out IP our clients are associated with,” the LA Times reported.
United Talent Agency also criticized Sora’s use of copyrighted property as “exploitation, not innovation,” in a statement on Thursday.
“There is no substitute for human talent in our business, and we will continue to fight tirelessly for our clients to ensure that they are protected,” UTA wrote. “When it comes to OpenAI’s Sora or any other platform that seeks to profit from our clients’ intellectual property and likeness, we stand with artists.”
In a letter written to OpenAI last week, Disney said it did not authorize OpenAI and Sora to copy, distribute, publicly display or perform any image or video that features its copyrighted works and characters, according to a person familiar with the matter.
Disney also wrote that it did not have an obligation to “opt-out” of appearing in Sora or any OpenAI system to preserve its rights under copyright law, the person said.
The Motion Picture Association issued a statement on Tuesday, urging OpenAI to take “immediate and decisive action” against videos using Sora to produce content infringing on its copyrighted material.
Entertainment companies have expressed numerous copyright concerns as generative AI has surged.
Universal and Disney sued creator Midjourney in June, alleging that the company used and distributed AI-generated characters from their movies despite requests to stop. Disney also sent a cease-and-desist letter to AI startup Character.AI in September, warning the company to stop using its copyrighted characters without authorization.
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