The UK’s chief competition officer has said that the UK “is absolutely open for business”. This comes a day after the UK blocked Microsoft’s $68.7 Billion acquisition of Activision – the maker of Call of Duty.
Senior executives from both companies were angry at the decision made yesterday by the Competition and Markets Authority. Activision’s Lulu Cheng Meservey said: “Global innovators, large and small, will take notice that, despite its rhetoric, Britain is closed for business.”
Brad Smith, Microsoft’s vice-chairman told the BBC today that this decision marked “the darkest day of our four decades here in Britain” and that entrepreneurs will now view the European Union as “a more attractive place to begin a business” rather than the UK.
Sarah Cardell, chief executive officer of the CMA, reacted, saying that she disagreed. She said on BBC Radio 4 Today: “I believe this decision shows the importance of supporting competition in the UK, and that the UK has an open door for business. We want to create a business environment that allows a wide range of companies to compete, grow and innovate. “That’s what is best for UK consumers, and for UK businesses.”
The CMA blocked the merger due to concerns that the move would limit innovation and reduce consumer choice. This is especially true in the rapidly growing cloud gaming market where Microsoft has already established a dominating position.
Smith criticized the fact that Microsoft had offered to discuss any concerns it may have had, but that Microsoft refused. He said, “This isn’t the way regulators in Brussels deal with companies.”
Cardell, however, rebuffed these claims and stated that the decision was reached following a “lengthy investigation in depth” which took six months. She said that Microsoft had plenty of opportunity to present their case. “We made the decision based on a great deal of engagement.” To reach our final conclusion, we reviewed more than one million documents.
Analysts believe that CMA’s stance against Big Tech, the largest takeover in gaming history, could be fatal for the deal. Both American companies have pledged to appeal the decision. They will still have to convince regulators from Europe and the US that they are allowed to proceed, even if the decision is overturned.
Cardell stated that “we’ve made the decision to stop the deal, and it’s important that I say we’re not the only ones doing this.” In the US, Federal Trade Commission has also filed a lawsuit to block the deal. There is a lot in common, I believe, when you compare the positions in the UK and in the US.