And when they operate abroad they have to follow laws in those external jurisdictions. They also cannot withdraw their services when they have legally binding commercial contracts in place and as I said earlier, it's not just about profits - Microsoft would probably lose 100x their UK revenue in overall value if they pulled a move like this as this would have a reaching knock-on effect to hospitals, education, military and other ethical services. Not even companies like Alphabet and Meta who have their on on-site lawyers full time in the UK High Court due to continual litigation have such disrespect from local judgements. If MS didn't bork their proposal then they wouldn't have egg on their face. They don't seem phased by the FTC which is far more significant but I'm sure they can buy their way out of that one.
No way would Xbox lose an entire market either not in their fragile situation - in fact, Activision would probably be better off without Microsoft. This is a deal to benefit executives pockets only. The consumer and staff will experience no change whatsoever and if anything like we saw with Bethesda, the acquisition will have a far greater negative impact. It's not like either of these companies need the deal either - it's just a desperate attempt to chip away at Sony's dominance using money because MS have absolutely nothing else to offer other than a ever-stale game pass and Redfall.
The deal will eventually go through as the CMA will buckle if they price is right with the chancellor or if they make some further amendments to get it over the line. The deal is absolutely nothing to celebrate for anyone other than the money men at MS and Activision. It's also put MS in an even worse light that what they are right now from a market player standpoint and just shows that corporate greed and blackmail is still rife within American companies.