One of Microsoft’s senior executives has lashed out after the software giant’s deal to buy US video games company Activision Blizzard was blocked by UK regulators.
The move is “bad for Britain” and shows the European Union is a better place to set up a company than the UK, Brad Smith told the BBC.
However, the Competition and Markets Authority (CMA) said its job is not to serve the interests of merging companies.
The CMA added that its decision would encourage growth.
The proposed $68.7bn (£55bn) takeover would see Microsoft getting its hands on hugely popular game titles like Call of Duty, Candy Crush and World of Warcraft.
But on Wednesday, the regulator said it was concerned the deal would innovate and give players fewer choices in the fast-growing cloud gaming market, where people buy subscriptions to access games online.
Microsoft has previously said the decision could impact its investments in the UK.
Speaking to BBC Radio 4 Today, Mr Smith, Microsoft’s vice-chairman and president, said the company was “very disappointed” with the CMA’s decision, “but beyond that, unfortunately, I think it’s bad for the UK. “
“There is a clear message here – the European Union is a more attractive place to start a business than the UK.”
The UK government has made it one of its post-Brexit goals to introduce a ‘loose’ regime of science and technology to encourage economic growth.
Mr Smith said that if the UK is to bring in investment and make the UK a place “where technology doesn’t just thrive, it’s created” then “it needs to look closely at the role of the CMA and the regulatory structure”. .
He added that “people are shocked, people are disappointed and people’s confidence in technology in the UK has been severely shaken by the CMA decision”.
However, the regulator hit back, saying: “It is the job of the CMA to do what is best for the people, businesses and economy of the UK and not to merge companies with commercial interests.”
It added that its decision means a number of companies, “big and small”, “can continue to compete in this fast-growing market”.
This will mean more innovation and more choice for consumers, it said.
“These are the best conditions to attract investment and support growth,” the regulator added.
Microsoft and Activision have announced that they will appeal the CMA’s decision.
For the deal to work, it needs to be approved by regulators in the UK, US and EU.
But it failed at the first hurdle. The CMA’s decision may nullify the entire acquisition.
This deal is important for Microsoft as it aims to strengthen its position in the fast-growing cloud gaming market.
Rather than buying game consoles and then playing games on them, cloud gaming means fans can stream titles over the internet rather than owning physical copies.
Microsoft has already invested heavily in this area as it sees the future of gaming in people playing on their phones, consoles, internet TVs and other devices.
The deal would also get it some very popular game titles to compete more with Sony, which has consistently opposed it.
Sony’s position is that its PlayStation would have restricted access to some of the world’s most popular titles, which would be bad for gamers.
Add Comment