The actions of the Competition and Markets Authority (CMA) in blocking Microsoft's acquisition of Activision Blizzard seem to have stirred unease within the UK government. Just two days ago, a group of MPs questioned the regulator, suggesting that it may have acted hastily in halting the deal. Now, Jeremy Hunt, the Chancellor of the Exchequer (equivalent to the US Treasury Secretary), has also joined the conversation.
In all fairness, Hunt carefully chose his words, highlighting the autonomy of the CMA and noting that the US Federal Trade Commission is also attempting to hinder the deal. Speaking at the British Chambers of Commerce annual conference yesterday, Hunt stated, "Regarding Microsoft, it involves the merger of two American companies that the US regulator is attempting to obstruct, and the UK regulator shares the same perspective." He further expressed his belief that "companies such as Microsoft and Google" are interested in investing in the UK due to its "unbiased regulators who operate independently from political control."
However, it was at that juncture when the finger-pointing commenced. Hunt asserted that he has no intention of undermining the independence of the CMA, but he does believe it is crucial for all the regulators to recognize their broader obligations towards fostering economic growth.
From the statement, one may simply deduce the following: With prominent individuals such as Prime Minister Rishi Sunak and Hunt himself avidly touting the post-Brexit UK as "the next Silicon Valley," the government is likely to prefer that the country's antitrust authority avoid upsetting the global tech titans. This sentiment is especially strong in light of the fact that the European Union approves deals that the CMA rejects, prompting influential business figures such as Microsoft's Brad Smith to declare unequivocally that "the European Union is a more appealing destination for initiating a business compared to the United Kingdom."
Hunt's comment reflects worries expressed by MPs earlier this week, when CMA officials were asked if they "consider the implications of [their] decisions... for the UK's international reputation as a place to do business." While it would be an exaggeration to say the government and the CMA are at odds over the decision, it appears that MPs and cabinet members are concerned about the impact the block will have on corporations' willingness to do business in the UK, especially given that the EU's acceptance of Microsoft's offered remedies has the UK looking like the international community's black sheep right now.
It will be fascinating to watch how and if this criticism (together with the actions of other national authorities) affects Microsoft and Activision's appeal of the CMA judgment. In theory, that appeal is only about whether the CMA followed the proper decision-making procedure when it issued its decision—the decision's actual merit isn't meant to be considered—but it's difficult to imagine pressure from the government and other antitrust enforcers having no effect at all. We won't know for a long time either way.