Chancellor says UK regulator must “understand wider responsibilities” after Microsoft Activision deal block

UK chancellor Jeremy Hunt has called upon the country’s regulator to understand its “wider responsibilities” to promote economic growth, following its recent block of Microsoft’s proposed $68.7bn Activision Blizzard buyout.

The remarks, reported by The Telegraph, follow questions from MPs this week directed at bosses of the Competition and Markets Authority regarding the decision which has scuppered Microsoft’s ambitions here in the UK – and potentially worldwide.

Both Microsoft and Activision have criticised the UK for disrupting the deal, and have labelled the country as being “bad for business” post-Brexit. The remarks come in stark contrast to the vision for the UK’s tech industry previously set out by Hunt and UK prime minister Rishi Sunak to become the “Silicon Valley” of Europe.

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“When it comes to Microsoft, there was a merger between two American companies that the US regulator is seeking to block, and the UK regulator took the same view,” Hunt said, speaking at the British Chambers of Commerce annual conference yesterday.

Hunt highlighted the fact the CMA was an independent body from the government – meaning he and it could disagree on its decisions – but that this independence still came with a responsibility to look at the bigger picture.

“I would not want to undermine that at all, but I do think it’s important all our regulators understand their wider responsibilities for economic growth.”

“I think one of the reasons companies like Microsoft and Google want to invest in the UK is because we have independent regulators that are not controlled by politicians and therefore they can be confident there will be a level playing field,” Hunt continued.

“I would not want to undermine that at all, but I do think it’s important all our regulators understand their wider responsibilities for economic growth.”

Hunt was speaking a day after the CMA’s bosses faced a grilling by British Chambers of Commerce annual conference MPs – several of whom seemed less that delighted by the regulator’s decision.

In particular, CMA chair Marcus Bokkerink faced repeated questions over whether the regulator considered the UK’s international reputation when making such a seismic decision.

“I understand the inference – that when a decision is made that blocks a deal, there are questions over whether the UK is open for business,” Bokkerink replied.

“I would challenge the premise that there is an impact on international confidence on doing business in the UK,” Bokkerink continued, suggesting that it would conversely not inspire confidence if the UK was seen to be “turning a blind eye to anti-competitive mergers”.

Back on Monday, the EU’s European Commission took a very different stance on the deal, greenlighting it as good to go across the English Channel.

“They have their own test to apply and they’ve reached their own view, and they’re fully entitled to reach that view,” CMA exec Sarah Cardell told MPs, when asked why the UK was taking a harder stance.

Activision boss Bobby Kotick previously said any move by the UK to block the deal would leave the UK looking less like Silicon Valley, and more like “Death Valley”.

Microsoft president Brad Smith meanwhile described the CMA’s decision as “probably the darkest day in our four decades in Britain”.

“There’s a clear message here – the European Union is a more attractive place to start a business than the United Kingdom,” Smith added, claiming that the “English Channel has never seemed wider”.

“Those sorts of claims are not borne out by the facts,” a spokesperson for UK Prime Minister Rishi Sunak said in response.

Microsoft is due to formally launch its appeal against the CMA’s ruling in the coming days.

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