Microsoft President Changes Tune After Criticism of UK

Microsoft’s President, Brad Smith, has adjusted his stance on the UK’s business landscape, retracting comments made last year in which he labelled the country “bad for business.” The shift comes after the Competition and Markets Authority (CMA) initially blocked Microsoft’s proposed acquisition of gaming giant Activision Blizzard.

In a recent interview with the BBC’s Today Programme, Smith acknowledged that the CMA, which eventually approved the deal after restructuring, was “tough and fair.” He credited the regulatory body for prompting Microsoft to modify its acquisition plan, specifically addressing concerns related to cloud gaming.

Last April, the CMA expressed apprehensions that Microsoft’s acquisition of Activision could stifle innovation and limit consumer choices in the rapidly growing cloud gaming sector. The competition regulator’s rejection dealt a setback to Microsoft’s ambitions, and Smith had previously hinted that such regulatory hurdles made the European Union a more attractive business destination.

The deal received approval in October after Microsoft revised its offer, addressing the CMA’s concerns. Smith emphasized that the CMA’s approach vindicated its position while allowing a pragmatic path forward for innovation and investment.

However, the CMA’s chief, Sarah Cardell, criticized Microsoft’s conduct, stating that the company’s tactics were not an appropriate way to engage with the authority. She pointed out that Microsoft had the opportunity to restructure during the initial investigation but insisted on measures deemed ineffective.

The controversial deal, initially announced in January last year, marked the largest takeover in gaming industry history. Microsoft’s commitment to invest £2.5bn in AI infrastructure in the UK over the next three years and its participation in the UK government’s AI Safety Summit were highlighted by Smith as positive developments in the company’s relationship with the UK.

“The UK government actually acted more boldly in 2023 than any other government on earth in committing £900m to build out that kind of infrastructure for the UK’s researchers,” he said. Smith concluded by emphasizing the importance of considering the year-end perspective rather than focusing on specific dates, referring to the initial rejection in April.