Microsoft president Brad Smith has backtracked on his hefty criticism of the UK’s Competition & Markets Authority (CMA) following approval for the company's acquisition of Activision Blizzard.
After the CMA blocked the $68.7 billion deal in April 2023, Smith launched a tirade against the regulator, suggesting that confidence in the UK had been “severely shaken” by the decision and that the European Union represented a “more attractive place to start a business”.
Speaking at the time, Smith told the BBC that the decision was 'bad for Britain' and that the government should “look hard” at the role of the CMA and the regulatory structure. It was, he said, the company's darkest day in 40 years of operating in the UK.
Now, though, Smith says the decision was "tough, and fair".
"It pushed Microsoft to change the acquisition that we had proposed, for Activision Blizzard to spin out certain rights that the CMA was concerned about with respect to cloud gaming," he told BBC Radio 4's Today Programme.
"I think the CMA vindicated its position, but still created a pragmatic path forward for innovation and investment. I think that is good for everyone.
"I wouldn’t step back necessarily from all of the concerns I raised when I talked way back in April, but I might choose slightly different words to make my point."
The CMA objected to the original terms of the deal on the grounds that it would harm competition and consumer choice.
Microsoft later agreed to transfer the cloud streaming rights for Activision's titles to French video games publisher Ubisoft for a fifteen-year period, allowing gamers to stream games such as Call of Duty and World of Warcraft on rival consoles. The deal eventually closed on 13 October 2023.
However, the company's reluctance to restructure the deal earlier on led CMA chief exec Sarah Cardell to criticize the firm, suggesting that it had willfully dragged out proceedings in a bid to stifle regulatory processes.
"Businesses and their advisors should be in no doubt that the tactics employed by Microsoft are no way to engage with the CMA,” she said. “Dragging out proceedings in this way only wastes time and money."
Meanwhile, the deal is still under investigation in the US, where the Federal Trade Commission (FTC) is attempting to block it on similar grounds, with an appeals court decision expected in the next few months.
Brad Smith the latest to backtrack on regulatory battles
Smith's outburst in the wake of the CMA's initial decision isn't the first example of a major industry exec coming out guns blazing in response to regulatory decisions.
Last year, OpenAI chief executive Sam Altman warned that the generative AI firm could pull out of Europe in response to the EU's proposed AI regulations.
The threat from Altman was heavily criticized by lawmakers across the union, with Thierry Breton, European commissioner for internal markets, hitting back at the comments.
Breton said at the time that rules on AI development “cannot be bargained”.
Altman also backtracked on his comments, and within days issued a statement insisting the firm had "no intention" of pulling out of the union.
