Microsoft says Activision deal block is its ‘darkest day in 4 decades in Britain’

Microsoft has hit out at the UK competition watchdog’s decision to block its proposed acquisition of Activision Blizzard.

On Wednesday, the Competition and Markets Authority (CMA) said it was preventing the $69 billion merger due to concerns about its impact on the future of the cloud gaming market.

Speaking to the BBC, Microsoft president Brad Smith said the decision marked “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.”

Smith said “people are shocked, people are disappointed, and people’s confidence in technology in the UK has been severely shaken”.

He claimed the decision was “bad for Britain”, and that if the UK wants to make it a place “where technology is not only going to flourish, but be created”, then “it needs to look hard at the role of the CMA and the regulatory structure”.

Smith added: “There’s a clear message here – the European Union is a more attractive place to start a business than the United Kingdom.”

While US and EU competition regulators have yet to decide whether to approve the deal, the CMA said its decision means the deal can’t be completed.

“Activision is intertwined through different markets – it can’t be separated for the UK. So this decision blocks the deal from happening globally,” the watchdog said.

Microsoft and Activision have confirmed their intention to appeal the CMA’s decision.

Further reading

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Analysts say ‘Microsoft’s Activision deal is not dead’ ahead of UK appeal

Wedbush Morgan and Ampere Analysis weigh in on the CMA's decision to block the $69 billion merger

Activision Blizzard CEO Bobby Kotick recently told CNBC that blocking Microsoft’s acquisition of the Call of Duty publisher would represent a major blow to the UK government’s ambition of becoming a technology superpower.

“If a deal like this can’t get through, they are not going to be Silicon Valley, they will be Death Valley,” he said in February, on the same day as UK prime minister Rishi Sunak announced the creation of a new standalone government department for science, innovation and technology.

CMA chief executive Sarah Cardell told the BBC she disagreed with Smith’s comments.

“I think this decision shows actually how important it is to support competition in the UK and that the UK is absolutely open for business,” she said.

“We want to create an environment where a whole host of different companies can compete effectively, can grow and innovate.”

Yesterday, Microsoft participated in a Downing Street reception to celebrate the success of the UK games industry and its role in growing the economy.

“Our globally renowned video games industry is attracting investment, creating skilled jobs and opening up opportunities for growth,” Sunak tweeted after attending the event, which was organised by trade body Ukie.