Microsoft's $75 billion deal with Activision is rescinded by the UK regulator

The $75 billion acquisition of Call of Duty creator Activision Blizzard by Microsoft has been reversed by the UK's competition regulator, removing a major obstacle to the deal's international prospects.

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The Competition and Markets Authority stated on Friday that it no longer believed there would be a "significant decrease in competition" in the console market if the maker of the Xbox acquired the publisher of the most popular gaming franchise.

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Preliminary conclusions issued by the CMA last month suggested that Microsoft would have to sell the Call of Duty division in order for the merger to proceed, a solution the software behemoth rejected as impractical.

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An ex-CMA attorney declared, "This is incredibly unusual." The CMA's change of stance in one of its most prominent cases since its authority and scope was expanded by the UK's exit from the EU made it easier for Microsoft to complete the transaction.

The UK regulator is still looking at how the purchase may affect competition in cloud gaming, which is the subject of a separate EU investigation.

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The US Federal Trade Commission, which filed a request to halt the transaction in December, is the last major regulatory hurdle.

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By Friday afternoon in New York, shares of Activision Blizzard had increased by more than 5%, though at about $84 it is still trading below Microsoft's $95 offer price.

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Activision's CEO, Bobby Kotick, had criticized the British regulator for "not really utilizing independent thought" and warned that a "fragile" UK government might miss a post-Brexit opportunity to attract thousands of jobs if it opposed the transaction.

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According to the CMA's preliminary findings from last month, the evidence revealed that the agreement would provide Microsoft incentive to restrict Call of Duty's accessibility on Sony's competing PlayStation.

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Microsoft, however, countered that errors in the financial modeling weakened the evaluation. This month, it was noted that "obvious mistakes in the calculations being utilized to assess the small number of Sony consumers who might transfer to Xbox in the absence of Call of Duty" had been discovered.

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The CMA announced on Friday that it had received a "substantial quantity of new data" in response to its initial preliminary findings, which showed that any decision by Microsoft to make Call of Duty exclusively available on Xbox would be "significantly lossmaking under any feasible scenario."

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The provisional findings were made in order to "provide the firms concerned, and any interested third parties, the chance to reply with new evidence before we make a final decision," said Martin Coleman, chair of the independent panel leading the CMA's investigation.

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However, a renowned antitrust attorney claimed that, as far as she was aware, there had only ever been one other "instance of 'updated' provisional findings."

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Microsoft said in a statement that it valued "CMA's rigorous and thorough review of the material," welcomed the updated provisional conclusions, and looked forward to collaborating with the regulator "to resolve any unresolved concerns."

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Activision Blizzard stated that the CMA's revised preliminary findings "reflect a commitment to supporting gamers and competition and indicate an enhanced knowledge of the console gaming business." Microsoft has previously provided workable solutions to all of the CMA's outstanding issues, according to Microsoft.

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The CMA has stated that Microsoft might be persuaded to make Activision Blizzard games exclusive to Game Pass, its subscription service, as part of its ongoing inquiry into the deal's possible effects on cloud gaming.

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Activision Blizzard's games will be made available on Microsoft's cloud gaming services thanks to deals the company recently reached with NVIDIA, Ubitus, and Boosteroid.