CMA boss insists UK is not anti-business
After blocking £55bn video game takeover . . .
The boss of the competition watchdog has defended the decision to block Microsoft’s £55bn mega-merger with video game maker Activision Blizzard – a day after the european Commission cleared the deal.
Sarah Cardell, chief executive of the Competition and Markets Authority (CMA), said it was not her intention to create a ‘hostile environment’ for business in the UK.
‘This is a sector where we want to make sure, together, that we can create and support the best conditions for competition that will enable companies big and small to thrive, including many UK start-ups, many UK competitors,’ she told MPs.
Cardell said the regulator engages regularly with businesses and ‘absolutely’ considered the attractiveness of Britain when setting its strategy.
‘I don’t find that we are operating . . . in a hostile environment,’ she told the business committee. Individual cases need to be decided on their merits.
‘When we’re looking strategically at the role of the competition authority, absolutely we will consider the impact of the decisions that we have made and the impact that has for the UK economy, including the reputation externally.’ her comments come just a day after the european Commission approved the world’s biggest gaming firm tie-up on condition that Microsoft ensures Activision’s game catalogue will be freely available on other cloud game-streaming providers over the next ten years.
The european regulators said the commitments offered by Microsoft and Activision to maintain competition ‘unlock significant benefits for competition and consumers’.
The decision marked a dramatic split from the CMA, which last month suffered a barrage of criticism after rejecting the merger.
Brad Smith, Microsoft vice-chairman, took aim at the ‘unaccountable’ regulator, claiming the english Channel has ‘never seemed wider’ for attracting businesses. he said: ‘There’s a clear message here – the eU is a more attractive place to start a business than the UK.’
And Activision, whose video games include Call Of Duty and World Of Warcraft, mocked Prime Minister Rishi Sunak’s quest to make the UK the ‘world’s next Silicon Valley’.
‘Global innovators will take note that, despite all its rhetoric, the UK is clearly closed for business,’ the San Francisco business said following the CMA’s block last month.
Microsoft and Activision are already putting together a legal team to challenge the UK ruling, while over in the US, the Federal Trade Commission is suing to block the merger with a court hearing due in August.
But Cardell yesterday stuck to her guns and said the proposed plans by Microsoft were inappropriate and would have allowed the tech giant to ‘ set the terms of trade for ten years’.
‘I believe that strong competition is a positive signal for the UK’s reputation externally,’ the CMA chief said. ‘You want to have strong
competition in markets, it promotes growth and promotes innovation.’ Asked about how much the CMA had liaised with the US authorities over the Activision Blizzard takeover, Cardell ( picturedbelow) said: ‘We are absolutely not, and I would clarify this because I think there’s been some speculation on this in the press – we are absolutely not doing the bidding of other agencies.’ Appearing alongside Cardell in front of MPs on the house of Commons committee was the CMA’s chairman Marcus Bokkerink, who also pushed back against the idea that blocking deals made Britain seem less attractive.
‘We are vigilant, as it is our duty to be vigilant, about investments that consolidate and entrench market power,’ he said.
‘I think I would challenge the premise that if there is an impact on international confidence in doing business in the UK, that the best way that that confidence is served is by turning a blind eye to anti-competitive mergers.’ Microsoft has until July 18 to complete the merger before owing Activision a termination fee, which could be as much as £2.4bn.