LONDON (Reuters) – Microsoft ( MSFT.O ) Chief Executive Brad Smith said the UK regulator’s decision to block the acquisition of Call of Duty maker Activision Blizzard had “restored confidence” in Britain as a destination for technology companies.
The Competition and Markets Authority (CMA), which operates independently of the government, blocked the deal on Wednesday, saying it could stifle competition in the emerging cloud gaming market.
Microsoft responded on Thursday by saying it was “perhaps Britain’s darkest day in four decades” and sent the wrong message to the global tech industry about the UK.
“If the UK government wants to attract investment, if it wants to create jobs, it needs to look very seriously at the role of the Capital Markets Authority, the UK regulatory body, this deal, the message the UK has just sent to the world.”
A spokesman for British Prime Minister Rishi Sunak said Smith’s comments were “not supported by the facts”.
“We believe the UK has a very attractive technology sector and a growing gaming market,” he said. “We will continue to actively work with Microsoft and other companies.”
Smith said Microsoft was working effectively with regulators in Brussels but not in London, which he said undermined Britain’s claim that it would be more flexible after Brexit.
He said the company responded to the Capital Markets Authority’s questions and asked to come back with any other concerns. “They kept quiet and we didn’t hear anything from them,” he said.
“The message here is clear – the EU is a much more attractive place to start a business if you want to sell than the UK will one day be,” he said.
But Sarah Cardell, chief executive of the Capital Markets Authority, said the regulator’s role was to ensure Britain was a competitive environment for businesses to grow and thrive.
“The decision by the Capital Markets Authority is an independent decision that we have taken after considering a comprehensive assessment of the impact of the transaction on competition and we believe it is the right decision for the UK,” she said.
He said the US Federal Trade Commission is also seeking to block the deal on anti-competitive grounds. Yesterday, Microsoft said it would reopen with “robust” support from Activision ( ATVI.O ).
Appeals on CMA decisions are reviewed by the Competition Appeal Court, which makes a decision on the nature of the decision. This will not be an opportunity for Microsoft to introduce new solutions.
