Microsoft strikes back in UK after Activision acquisition blocked

  • Microsoft: The decision shook the UK’s confidence
  • Says the EU is the best place to start a business
  • Regulator: We protect UK consumers and businesses
  • The UK has an attractive technology sector – Prime Minister’s spokesman

LONDON, April 27 (Reuters) – Microsoft ( MSFT.O ) Chairman Brad Smith said the UK regulator’s decision to block the takeover of ‘Call of Duty’ maker Activision Blizzard had “shaken confidence” in Britain as a place for tech businesses.

The Competition and Markets Authority (CMA), which operates independently of the government, blocked the deal on Wednesday, saying it could hurt competition in the nascent cloud gaming market.

Microsoft hit back on Thursday, saying it was “the darkest day in our four decades in Britain” and sent 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 (…) that’s the role of the CMA, the regulatory body in the United Kingdom, this transaction and the message the United Kingdom has now 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 technology sector and a growing sports market,” he said. “We will continue to engage with Microsoft and other companies.”

Smith said Microsoft had worked effectively with regulators in Brussels but not in London, and he disputed Britain’s claim that it would be more flexible after Brexit.

He said the company has responded to the CMA’s queries and told them to come back with any concerns. “They have gone quiet and we haven’t heard anything from them,” he said.

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“There is a clear message here – the EU is a much more attractive place to start a business than the United Kingdom if you want to sell some day,” he added.

But CMA chief executive Sarah Gardell said the regulator’s role was to ensure Britain was a competitive environment for businesses to grow and thrive.

“The CMA’s decision is an independent decision that we reached after looking at the overall assessment of the impact of the deal on competition and we think it is the right decision for the UK,” he said.

He noted that the US Federal Trade Commission is also pushing to block the deal on anti-competitive grounds.

Microsoft said yesterday it would appeal with “aggressive” support from Activision ( ATVI.O ).

Appeals against CMA decisions are heard by the Competition Appeal Tribunal, which makes a judgment on the merits of the decision. This will not be an opportunity for Microsoft to submit new solutions.

Reporting by Muwija M and Paul Chandle; Editing by Sarah Young

Our Standards: Thomson Reuters Trust Principles.

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