LONDON, April 27 (Reuters) – Microsoft ( MSFT.O ) president Brad Smith said the UK regulator’s decision to block its takeover of ‘Call of Duty’ maker Activision Blizzard “prompted of confidence” in Britain as a destination for tech businesses.
The Competition and Markets Authority (CMA), which operates independently from the government, blocked the deal on Wednesday, saying it could reach competition in the burgeoning cloud gaming market.
Microsoft hit back on Thursday, saying it was “probably the darkest day in our four decades in Britain” and sending the wrong message to the global tech industry about the UK.
“If the United Kingdom government wants to bring in investment, if it wants to create jobs (…) it needs to look closely at the role of the CMA, the regulatory structure in the United Kingdom, this transaction, and the message that the United Kingdom told the world,” he told BBC radio.
A spokesman for British Prime Minister Rishi Sunak said Smith’s comments were “not borne out by the facts”.
“We continue to believe that the UK has a very attractive tech sector and a growing games market,” he said. “We will continue to actively engage with Microsoft and other companies.”
Smith said Microsoft had cooperated effectively with regulators in Brussels but not in London, which he said belied Britain’s claim that it would be more flexible after Brexit.
The company answered the CMA’s questions, he said, and it told them to come back with any concerns. “They went quiet, we didn’t hear anything from them,” he said.
“There is a clear message here – the European Union is a more attractive place to start a business if you want to sell it at a later date than the United Kingdom,” he added.
But CMA Chief Executive Sarah Cardell said the regulator’s role was to ensure Britain was a competitive environment for businesses to grow and thrive.
“The decision taken by the CMA is an independent decision that we reached looking at the overall assessment of the impact of the deal on competition, and we think that is the right decision for the UK,” he said.
He noted that the US Federal Trade Commission is also pushing for the deal to be blocked on competition grounds.
Microsoft said yesterday it would appeal, with “aggressive” support from Activision ( ATVI.O ).
Appeals against CMA decisions are heard by the Competition Appeals Tribunal, which makes a judgment on the merits of the decision. This will not be an opportunity for Microsoft to submit new remedies.
Reporting by Muvija M and Paul Sandle; editing by Sarah Young
Our Standards: The Thomson Reuters Trust Principles.
