What am I missing here? I thought both Microsoft and Activision were American companies, why would the UK even have a say in this? Is it a "if you buy it you can't operate here" kind of statement?
That's my understanding too. At the end of the day, I'm sure this will be a PITA, but what stops Activision from spinning off its UK business operations into a separate entity that will not be part of the Activision-Microsoft deal?
Not to mention that the only part of distribution this can affect is the physical one. I mean, if I want to sell a game on Steam and sell it in all the regions Steam operates in, I can do so without needing a business presence in every individual country...
Not only the UK government still has a significant power to leverage here, but also corporate doesn't usually want to directly go to war against governments since that's going to be an alarming signal for all other governments across the globe, especially EU who is actively seeking a way to regulate US big techs. Even US cannot protect them without a good justification.