April 27 (UPI) — Microsoft hit out at Britain on Thursday over its decision to block its $69 billion takeover of game developer Activision saying the European Union was a more attractive place to start a business.
The decision by the Competition and Markets Authority on Wednesday on grounds the merger would consolidate Microsoft’s dominance in cloud computing was a “bad day” for Britain that would discourage investment in its tech sector, Microsoft President Brad Smith told the BBC.
He added it was Microsoft’s most significant setback since it set up its British operation in the early 1980s.
“There’s a clear message here — the European Union is a more attractive place to start a business than the United Kingdom,” Smith said.
“This decision, I have to say, 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.”
“People are shocked, people are disappointed, and people’s confidence in technology in the U.K. has been severely shaken,” Smith added calling on the government to “look hard at the role of the CMA and the regulatory structure.
The CMA responded by saying its decision ensured the market remained accessible to all players, allowing them to continue to compete in Britain’s rapidly growing cloud-gaming sector.
“It is the CMA’s job to do what is best for the people, businesses and economy of the U.K., not merging firms with commercial interests,” a CMA spokesperson told UPI.
“Our decision ensures that a range of different businesses — big and small — can continue to compete in this rapidly growing market, driving innovation and consumer choice. Those are the best conditions to attract investment and support growth.”
The CMA pointed out that the U.S. Federal Trade Commission was also suing Microsoft in the United States to block the deal.
Microsoft already enjoyed a powerful position and head start over other competitors in cloud gaming and the deal would strengthen that advantage giving it the ability to “undermine new and innovative competitors,” said Martin Coleman, chair of the independent panel of experts that carried out the CMA’s investigation.
“Microsoft engaged constructively with us to try to address these issues and we are grateful for that, but their proposals were not effective to remedy our concerns and would have replaced competition with ineffective regulation in a new and dynamic market,” Coleman added.
The acquisition is also strongly opposed by rival game developer and Playstation console maker Sony over fears it would see Microsoft’s Xbox platform squeeze its Playstation out of the market.
In announcing its decision on Wednesday, the watchdog said the acquisition would “reinforce Microsoft’s advantage” in cloud gaming by bringing in-house Activision’s blockbuster brands including Call of Duty, Overwatch and World of Warcraft.