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Microsoft President reverses UK criticism after Activision approval

By Nithya Bose in Microsoft News, posted January 2, 2024

Microsoft President Brad Smith has pulled back on his criticism of the UK, retracting his statement that the country was "bad for business."

The change in stance follows the Competition and Markets Authority's (CMA) approval of Microsoft's proposed acquisition of gaming giant Activision Blizzard.

Initially, the CMA had blocked the deal, expressing concerns about potential reductions in innovation and consumer choice in the rapidly growing cloud gaming sector.

In an interview with the BBC's Today Programme, Smith acknowledged the CMA's rigorous and fair approach, stating that it compelled Microsoft to modify the acquisition plan.

Specifically, Activision Blizzard would spin out certain rights related to cloud gaming that had raised concerns for the CMA.

The deal received CMA approval in October after Microsoft restructured its offer.

Last year, when the CMA first rejected the acquisition, Smith had also suggested that the European Union became a more attractive place for business.

This setback blew the UK government's ambition to establish the country as a tech powerhouse.

“Dragging out proceedings in this way only wastes time and money."

While Smith now praises the CMA for vindicating its position, the competition watchdog's boss, Sarah Cardell, criticized Microsoft for its conduct.

She said: "Businesses and their advisors should be in no doubt that the tactics employed by Microsoft are no way to engage with the CMA.

"Microsoft had the chance to restructure during our initial investigation but instead continued to insist on a package of measures that we told them simply wouldn't work.

“Dragging out proceedings in this way only wastes time and money."

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The Microsoft-Activision Blizzard deal was heralded as the largest takeover in gaming industry history and faced global regulatory scrutiny.

Microsoft submitted a restructured proposal in August 2023, ultimately gaining approval.

Under the revised offer, Microsoft agreed to transfer the rights to stream Activision games from the cloud to Ubisoft, a French video game publisher, for 15 years.

This arrangement ensures gamers using consoles other than Microsoft's Xbox, such as Sony's PlayStation, can still access cloud-streamed games like Call of Duty, Overwatch, and World of Warcraft.

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£2.5 billion in UK AI infrastructure

In addition to the gaming industry developments, Smith highlighted Microsoft's commitment to invest £2.5 billion in AI infrastructure in the UK over the next three years.

He said: "The UK government actually acted more boldly in 2023 than any other government on earth in committing £900m to build out that kind of infrastructure for the UK's researchers.

"That, I think, adds up to a strong year. And it's a good reminder - sometimes it's more important to think about how the year ends than what happened on a particular day called the 26th of April."

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