Bosses of the UK’s competition watchdog said today that they will not turn a blind eye to anti-competitive mergers as they defended the agency’s controversial move to block Microsoft’s £55bn takeover of Activision Blizzard after it was waved through by EU regulators yesterday.
The decision to stop the deal by the Competition and Markets Authority (CMA) last week sparked a barrage of criticism, with Microsoft’s president Brad Smith describing the move as “bad for Britain” and Activision saying “the UK is clearly closed for business”. Both firms are appealing the decision.
Criticism of the watchdog was fuelled further by the EU regulator’s decision to give the takeover the greenlight.
However, any merger would require the go ahead of the three major global competition watchdogs in the US, UK and EU. The US Federal Trade Commission has also moved to block the deal.
In a hostile grilling by MPs today, the CMA’s chief and chair mounted a defence of their decision to block the deal, claiming it was essential for competition in the nascent cloud gaming market.
“It is our duty to be vigilant about investments that consolidate and entrench market power,” Marcus Bokkerink, CMA chair, told MPs on the Business and Trade Committee.
“I think I would challenge the premise that if there is an impact on international confidence in doing business in the UK, that the best way that that confidence is served is by turning a blind eye to anti-competitive mergers,” he said.
The CMA blocked the takeover on the grounds it could lessen competition in the fledgling UK cloud gaming market by giving Microsoft it control over where Activision games are available.
However, the European Commission was wooed by Microsoft’s assurances that it would place no restriction on distribution for the next ten years.
The CMA’s chief executive Sarah Cardell rebuffed the claims that the UK was closed for business today, arguing that “strong competition is a very positive signal for the UK’s reputation externally”.