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Microsoft hits out at CMA: "darkest day" in four decades working in the UK

"Bad for Britain."

Microsoft's Brad Smith holds up his unsigned PlayStation contract.
Image credit: Nicolas Peeters/Melting Prod

Microsoft has hit out at the Competition and Markets Authority's shock decision to block Microsoft's $68.7bn Activision Blizzard takeover, declaring it "bad for Britain".

In an interview with the BBC, Microsoft president Brad Smith said yesterday was "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."

Newscast: Can Microsoft's Activision Blizzard deal appeal succeed?Watch on YouTube

The decision by the CMA prevents Microsoft from buying the publisher behind Call of Duty, World of Warcraft and Candy Crush.

The CMA is concerned over the deal's proposed impact on the cloud gaming sector. In its report, the CMA said Microsoft's ownership of Activision Blizzard risked "stifling competition in this growing market". Microsoft has said it will now appeal.

A clearly furious Smith said: "There's a clear message here - the European Union is a more attractive place to start a business than the United Kingdom."

The "English Channel has never seemed wider," he added.

The CMA responded by telling the BBC it had to do what's best for people, "not merging firms with commercial interests."

While EU and US regulators are yet to have their say on the deal, the CMA insisted its decision means it cannot go ahead globally.

"Activision is intertwined through different markets - it can't be separated for the UK. So this decision blocks the deal from happening globally," it said.

The BBC points out Prime Minister Rishi Sunak has said he wants the UK to lead the world in technology, with Chancellor Jeremy Hunt stating ambitions to "turn Britain into the world's next Silicon Valley".

Coincidentally, yesterday - the same day the CMA blocked the deal - a reception was held at Downing Street to "celebrate" the success of the UK video game industry and its role in growing the economy.

Sunak himself tweeted: "Our globally renowned video games industry is attracting investment, creating skilled jobs and opening up opportunities for growth.

"It was great to drop in to today's gaming event and meet some of the bright young talent leading the way in this exciting sector."

Yesterday, strong comments from Activision executives threatened reduced investment in the UK as a result of the CMA's decision.

Activision said it was a "disservice to UK citisens, who face increasingly dire economic prospects".

"The CMA's report contradicts the ambitions of the UK to become an attractive country to build technology businesses," an Activision Blizzard spokesperson said. "We will work aggressively with Microsoft to reverse this on appeal. The report's conclusions are a disservice to UK citisens, who face increasingly dire economic prospects. We will reassess our growth plans for the UK. Global innovators large and small will take note that - despite all its rhetoric - the UK is clearly closed for business."

Microsoft has said the decision may also have an impact on its UK investment.

Smith called on the UK to "look hard at the role of the CMA and the regulatory structure".

He added: "people are shocked, people are disappointed, and people's confidence in technology in the UK has been severely shaken."

What happens next? Read our explainer on Microsoft and Activision's appeal process.

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