Microsoft’s president Brad Smith expressed his dismay at the decision of the UK regulator to block its acquisition of Activision Blizzard, the maker of Call of Duty. Smith stated that this decision had negatively impacted confidence in Britain as a favorable destination for tech companies.
The Competition and Markets Authority (CMA), an independent body, justified its intervention by claiming that the deal could harm competition in the emerging cloud gaming industry.
Responding to the CMA’s decision, Microsoft criticized it as the “darkest day” they had experienced in their four decades of operation in Britain. They argued that this ruling sent a negative message to the global tech industry about the UK’s business environment.
In an interview with BBC radio, Smith called on the UK government to carefully examine the role of the CMA, the regulatory structure, and the message conveyed to the world through this transaction if it wanted to attract investment and create jobs.
However, a spokesperson for British Prime Minister Rishi Sunak contradicted Smith’s remarks, emphasizing the UK’s attractive tech sector and growing games market. The government affirmed that it would continue proactive engagement with Microsoft and other companies.
Smith pointed out that while Microsoft had effectively collaborated with regulators in Brussels, their experience with London contradicted the UK’s claim of flexibility post-Brexit.
According to Smith, Microsoft had promptly addressed the CMA’s inquiries and had invited them to express any further concerns. However, the CMA did not provide any additional feedback. He concluded that the situation conveyed a clear message: starting a business and eventually selling it was more advantageous in the European Union than in the United Kingdom.
In response, CMA Chief Executive Sarah Cardell explained that the regulator’s objective was to ensure a competitive environment in which businesses could prosper and grow. She affirmed that the decision to block the deal was independent and based on a comprehensive assessment of its impact on competition, stating that it was the right decision for the UK.
Cardell also highlighted that the US Federal Trade Commission shared the CMA’s concerns regarding competition in this case.
Microsoft announced its intention to appeal the CMA’s decision and stated that it would receive “aggressive” support from Activision.
Appeals against CMA rulings are heard by the Competition Appeals Tribunal, which assesses the merit of the decision. It is important to note that this process does not allow Microsoft to propose new remedies.
© Thomson Reuters 2023
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