Furious row as Microsoft blasts Britain over decision to block £60bn Call of Duty deal
Microsoft faced a backlash last night following the US technology giant’s warning that Britain was anti-business after regulators blocked a major deal.
The Competition and Markets Authority (CMA) has refused to sanction the £60billion acquisition by Microsoft of Call of Duty video game maker Activision Blizzard.
That sparked a ferocious response from Microsoft who said the decision was ‘bad for Britain’, labelling the UK as inferior to European neighbours.
But No 10 said Microsoft’s assertions were ‘not borne out by the facts’ while others accused it of buying up competitors only to shut them down.
Brad Smith, Microsoft vice-chairman, took aim at the ‘unelected’ and ‘unaccountable’ regulator, claiming the English Channel has ‘never seemed wider’ for attracting businesses.
The CMA ruling was a blow for Activision boss Bobby Kotick, who was set for a £300million windfall. He attacked the CMA’s reasoning as ‘flawed’ and said it would hurt competition rather than help it.
Brad Smith, Microsoft vice-chairman, took aim at the ‘unelected’ and ‘unaccountable’ regulator, claiming the English Channel has ‘never seemed wider’ for attracting businesses.
The CMA said a merger would encourage Microsoft to raise the cost of gaming subscriptions and could mean ‘reduced innovation and less choice for UK gamers’.
Its 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 against 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 darkest day in our four decades in Britain.’ It does more than shake our confidence in the future of the opportunity to grow a technology business in Britain than we’ve ever confronted before.’
Activision, whose blockbuster video games include Call of Duty and World of Warcraft, appeared to poke fun at Prime Minister Rishi Sunak’s quest to make the UK the ‘world’s next Silicon Valley’.
‘Global innovators large and small will take note that, despite all its rhetoric, the UK is clearly closed for business,’ the San Francisco firm said. But the CMA hit back, stating that the UK is ‘absolutely open for business’.
‘We want to create an environment where a whole host of different companies can compete effectively, can grow and innovate,’ chief executive Sarah Cardell said. Tory MP Iain Duncan Smith said that the Microsoft chief’s comments were ‘counter-productive’.
He added: ‘There is a bad record for Microsoft buying up competitors and then shutting them. The issues are much more nuanced than this hugely-paid executive realises.’
He said the CMA move could be read as pro-growth, allowing more firms to operate in the industry. The Prime Minister’s spokesman said: ‘More broadly, those sorts of claims are not borne out by the facts. The UK games market is rapidly growing, it’s doubled in size over the past decade to £7billion in 2022.’
Last year the UK became the third country to have a tech sector valued at $1trillion (£802billion), behind only China and the US in terms of investment.
