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Microsoft responds to UK Activision block.

Photo: Microsoft

Microsoft (MSFT.O) president Brad Smith said the U.K. regulator’s rejection of its takeover of ‘Call of Duty’ creator Activision Blizzard “had shaken confidence” in Britain as a tech hub.

On Wednesday, the independent Competition and Markets Authority (CMA) banned the acquisition, claiming it may hurt cloud gaming competition.

Microsoft responded Thursday, calling it “probably the darkest day in our four decades in Britain” and sending the incorrect message about the UK to the global software sector.

“If the government of the United Kingdom wants to bring in investment, if it wants to create jobs (…), it needs to look hard at the role of the CMA, the regulatory structure in the United Kingdom, this transaction, and the message that the United Kingdom has just said to the world,” he told BBC radio. British Prime Minister Rishi Sunak’s office said Smith’s remarks “not borne out by the facts.”

“We continue to believe that the U.K. has an extremely attractive tech sector and a growing games market,” he added. “We will continue to engage proactively with Microsoft and other companies.”

Smith claimed Microsoft worked well with Brussels authorities but not London regulators, contradicting Britain’s promise that it will be more flexible after Brexit.

He claimed the corporation had addressed the CMA’s issues and invited them to return. “They went silent; we heard nothing from them,” he added.

“There’s a clear message here – the European Union is a more attractive place to start a business if you want to someday sell it than the United Kingdom,” he said. CMA Chief Executive Sarah Cardell said the regulator’s mission was to make Britain a competitive environment for businesses to flourish and prosper.

“The CMA takes an independent decision that we reached looking at an overall assessment of the deal’s impact on competition, and we think that is the right decision for the U.K.,” she added.

She said the U.S. Federal Trade Commission wanted the purchase stopped for competitive reasons. Microsoft appealed yesterday with “aggressive” backing from Activision (ATVI.O). The Competition Appeals Tribunal decides CMA rule appeals. Microsoft cannot submit additional remedies.

 

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