Furious row as Microsoft blasts Britain over decision to block £60bn Call of Duty deal
Microsoft faced a backlash last night following the US tech giant’s warning that Britain was anti-business after regulators blocked a major deal.
The Competition and Markets Authority (CMA) has refused to approve Microsoft’s £60 billion acquisition of Call of Duty video game maker Activision Blizzard.
That prompted a furious reaction from Microsoft, who said the decision was “bad for Britain” and labeled the UK as inferior to European neighbours.
But No. 10 said Microsoft’s claims were “not supported by the facts,” while others accused it of buying up competitors and then shutting them down.
Microsoft Vice Chairman Brad Smith took aim at the “unelected” and “irresponsible” regulator, claiming that the English Channel “never seemed wider” to attract businesses.
The CMA ruling was a blow to Activision boss Bobby Kotick, who expected a £300 million windfall. He attacked the CMA’s reasoning as “flawed,” saying it would hurt rather than help competition.
Microsoft Vice Chairman Brad Smith took aim at the “unelected” and “irresponsible” regulator, claiming that the English Channel “never seemed wider” to attract businesses.
The CMA said a merger would encourage Microsoft to increase the cost of gaming subscriptions and could lead to ‘less innovation and less choice for UK gamers’.
The decision, which could see the deal collapse completely, was rooted in concerns about cloud gaming – the ability to stream games over the internet.
Activision and Microsoft plan to appeal the CMA’s decision.
Smith told the BBC: ‘There’s a clear message here: the EU is a more attractive place to start a business than the UK.
“This decision is probably the blackest day in our four decades in Britain.” It does more than erode our confidence in the future of the chance to grow a technology company in Britain more than ever before.”
Activision, whose blockbuster video games include Call of Duty and World of Warcraft, appeared to mock Prime Minister Rishi Sunak’s quest to make the UK “the world’s next Silicon Valley.”
“Global innovators big and small will take note that, for all its rhetoric, the UK is clearly closed for business,” the San Francisco company said. But the CMA hit back, stating that the UK is ‘absolutely open for business’.
“We want to create an environment where a wide variety of companies can effectively compete, grow and innovate,” said CEO Sarah Cardell. Tory MP Iain Duncan Smith said the Microsoft chief’s comments were “counterproductive”.
He added: “There is a bad reputation of Microsoft buying up competitors and then shutting them down. The issues are much more nuanced than this well-paid executive realizes.’
He said the CMA movement can be read as pro-growth, allowing more companies to operate in the industry. The Prime Minister’s spokesman said: ‘More generally, these kinds of claims are not supported by the facts. The UK games market is growing rapidly and has doubled in size over the past decade to reach £7 billion by 2022.”
Last year, the UK became the third country with a $1 trillion (£802 billion) technology sector, behind only China and the US in terms of investment.