Microsoft president softens stance on UK regulator following Activision buyout

While Microsoft president Brad Smith has not completely U-turned on his initial stance regarding the Competition and Market Authority’s (CMA) original decision to block his company’s acquisition of Activision Blizzard, he has now described the regulator as “tough and fair.”

Although the deal has since been finalized, it faced push-back in the U.K. last April, with the CMA citing concerns of Microsoft gaining too much control in the cloud gaming space. At the time, Smith made no effort to hide his frustration with the decision, going so far as to call it “the darkest day in our four decades in Britain” (via GamesIndustry.biz).

His harsh comments made it sound like the company would consider decreasing its investment in the U.K. Not to mention he specifically messaged the prime minister to “look hard at the role of the CMA,” which comes across as Smith suggesting the organization be restructured.

All that appears to be water under the bridge for Smith, though. In an interview with the BBC’s Radio 4 Today on Jan. 1, (transcribed by The Verge), Smith called the CMA “tough and fair” and seems to regret at least some of his previous wording. “I certainly learned a lot personally. 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,” Smith said.

“The CMA held to a tough standard and I respect that. … 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,” Smith continued. Smith is referring to a new arrangement to sell Activision’s cloud gaming rights to Ubisoft, which was enough for the CMA to change its mind and approve the acquisition.

I can’t imagine Smith would be so willing to change his tune had the CMA stuck to its guns and continued to block the deal, but what sort of impact this would’ve had on the acquisition and/or Microsoft’s relationship with the U.K. ultimately doesn’t matter.

That said, the CMA’s chief executive Sarah Cardell made a point to call out Microsoft over its handling of the situation. In an October statement about the CMA’s final approval of the deal, Cardell 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.”

Believe it or not, the Microsoft/Activision saga technically isn’t over since the U.S. regulator the Federal Trade Committee (FTC) is appealing its failed attempt to block the acquisition (via Reuters). But it’s hard to imagine it succeeding, considering it’s the only regulatory body in the world that disapproves the deal.