Microsoft has hit out at the Competition and Markets Authority’s shocking decision to block Microsoft’s $68.7bn Activision Blizzard acquisition, declaring it “bad for the UK”.
In an interview with the BBC, Microsoft chairman Brad Smith said that yesterday was “probably our darkest day in the UK in four decades”.
“This has more than shaken our confidence in the future of opportunity to develop a technology business in the UK like we have never faced before.”
The CMA’s decision blocks Microsoft from buying Call of Duty, the publisher of World of Warcraft and Candy Crush.
The CMA is concerned about the proposed impact of the deal on the cloud gaming sector. In its report, the CMA said that Microsoft’s ownership of Activision Blizzard risks “stiff competition in this growing market”. Microsoft has said it will now appeal.
A clearly furious Smith said: “There is a clear message here – the European Union is a more attractive place to start a business than the United Kingdom.”
He said, “The English Channel has never felt wider.”
The CMA responded to the BBC by saying it had to do what was best for the people, “not merging firms with commercial interests.”
While EU and US regulators have yet to put their say on the deal, the CMA has insisted its decision means it cannot go ahead globally.
“The activity is interlinked through different markets – it cannot be isolated to the UK. Therefore this decision prevents the deal from taking place globally,” it said.
The BBC reports that Prime Minister Rishi Sunak has said he wants the UK to lead the world in technology, with Chancellor Jeremy Hunt citing an ambition to “turn Britain into the world’s next Silicon Valley”.
Coincidentally, yesterday – the same day the CMA blocked the deal – a reception was held at Downing Street to “celebrate” the success of the UK video game industry and its role in the growing economy.
Sunak himself tweeted: “Our globally renowned video game industry is attracting investment, creating skilled jobs and opening up opportunities for growth.
“It was great to come to today’s gaming event and meet some of the bright young talents leading the way in this exciting field.”
Our globally renowned video game industry is attracting investment, creating skilled jobs and opening up opportunities for growth.
it was great to drop by today @uk_ie Meet the gaming event and some of the bright young talents leading the way in this exciting field. https://t.co/vulBKdHiqu
— Rishi Sunak (@RishiSunak) April 26, 2023
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Yesterday, strong comments from Activision executives threatened less investment in the UK as a result of the CMA’s decision.
Activision said it “does a disservice to UK citizens, who face increasingly dire economic prospects”.
“The CMA’s report contradicts the UK’s ambitions to be an attractive country to build technology businesses in,” said an Activision Blizzard spokesperson. “We will work aggressively with Microsoft to reverse this on appeal. The report’s findings do a disservice to UK citizens, who face increasingly dire economic prospects. We will re-evaluate our growth plans for the UK.” Global innovators big and small will take note that – despite all their rhetoric – the UK is clearly closed for business.”
Microsoft has said that this decision may also have an impact on its investment in the UK.
Smith called on the UK to “work hard on the role of the CMA and regulatory structure”.
He added: “People are shocked, people are disappointed, and people’s faith in technology in the UK has been seriously shaken.”
what happens next? Read our explainer on Microsoft and Activision’s appeals process.