Microsoft President Brad Smith had previously criticized the UK’s Competition and Markets Authority (CMA) for blocking the company’s $68.7 billion deal with Activision Blizzard. However, after Microsoft restructured the deal and gained approval from the CMA, Smith has changed his tune. In an interview with BBC Radio 4’s Today program, he now describes the regulator as “tough and fair.” This article delves into Smith’s revised perspective, CMA’s role in the deal, and the ongoing scrutiny Microsoft faces in the US.
Initially, Smith had expressed strong dissatisfaction with the CMA’s decision to block the Microsoft-Activision Blizzard deal. He claimed that confidence in the UK had been “severely shaken” and even went as far as suggesting that the European Union would be a more attractive place for businesses. However, in his recent interview, Smith acknowledged that he has learned a lot and would choose different words to make his point.
The CMA’s rejection of the original deal forced Microsoft to restructure its agreement. This included giving up key cloud gaming rights in the UK and various other markets globally. Smith commended the CMA for holding Microsoft to a high standard and acknowledged the regulator’s concerns regarding cloud gaming. While Microsoft made concessions to meet the CMA’s requirements, the regulator was unimpressed with the company’s earlier tactics, claiming they were not an effective way to engage with the CMA.
Despite gaining approval from the CMA, Microsoft’s deal still faces scrutiny from the US Federal Trade Commission (FTC). The FTC is currently pursuing a case against the deal, and a decision on an appeal over the FTC v. Microsoft case is expected from the Ninth Circuit Court of Appeals in the near future. Additionally, the FTC has a separate administrative case against Microsoft’s deal, set to commence shortly after the appeal decision unless the FTC decides to abandon its case entirely.
Brad Smith’s change of heart regarding the UK’s Competition and Markets Authority highlights the evolving dynamics of the Microsoft-Activision Blizzard deal. Smith’s praise for the CMA’s toughness and fairness demonstrates a willingness to collaborate and address regulatory concerns. The company’s decision to restructure the deal, sacrificing cloud gaming rights, indicates their commitment to appeasing regulators. However, Microsoft still faces ongoing challenges from the US FTC, emphasizing the complexity and significance of the deal’s global scrutiny.