The UK has restricted Microsoft and Activision from acquiring an interest in each other after blocking $68.7 billion merger

• The UK is restricting Microsoft and Activision from acquiring an interest in each other.
• The competition regulator published an interim order to prevent any action without its consent.

The UK's competition regulator has issued an interim order to restrict Microsoft and Activision from acquiring an interest in each other.

It comes weeks after the decision by the regulator, the Competition and Markets Authority (CMA), to block a $68.7 billion merger between the two companies.

On Thursday, the CMA published an order that said Microsoft and "Call of Duty" developer Activision would need "prior written consent" from the body before making any acquisitions linked to their respective companies.

It's the latest move from the UK's watchdog to bring greater scrutiny to the two companies amid fears that the blockbuster deal struck in January 2022 would harm the competition.

The regulator's key concerns revolve around Microsoft's potential for outsized influence over an emerging cloud gaming market in what would become the biggest takeover deal in the gaming sector's history.

"The CMA has prevented Microsoft's proposed purchase of Activision over concerns the deal would alter the future of the fast-growing cloud-gaming market, leading to reduced innovation and less choice for UK gamers over the years to come," the regulator said last month.

The CMA first started its probe into the deal in September 2022, with a first announcement about its concerns coming in Feburary. Insider understands that the latest move is a procedural step ahead of the CMA's issuing of its final order on the deal.

Microsoft president Brad Smith rejected the decision by the CMA last month, claiming that the tech giant would be making an appeal. He said the CMA's ruling reflected its decision to reject a "pragmatic path" towards reconciling any competition concerns and reflected "a flawed understanding" of the cloud technology market.

In a statement, a Microsoft spokesperson said: "We remain firmly committed to this deal and look forward to presenting our case to the Competition Appeal Tribunal."

Activision did not immediately respond to Insider's request for comment.

This is a developing story. Please check back for updates ...