Microsoft's Brad Smith says the CMA blocking the Activision deal was “probably the darkest day in our four decades” in the UK and will be “bad for Britain”
Microsoft's president has attacked the UK after it was blocked from buying US gaming firm Activision …
Context & Ripple Effects
The CMA had already outlined concerns that Microsoft could withhold games from rivals, and its formal decision then stopped the proposed $68.7B transaction on competition and innovation grounds. The regulator’s emphasis on the emerging cloud-gaming market made this a dispute over a developing distribution channel rather than only traditional console competition.
The confrontation became a test of the CMA’s post-Brexit standing: coverage later described how the UK decision forced a revised transaction even as other jurisdictions took different paths. Microsoft ultimately received UK approval and softened its public criticism of the CMA, underscoring that the dispute was about deal terms and regulatory authority, not a permanent market exit.
First-order effects
- Microsoft and Activision could not complete the deal in its proposed form in the UK; Microsoft said it would appeal the CMA’s decision to block the acquisition.
- Brad Smith’s remarks escalated the public dispute between Microsoft and the UK regulator, putting the CMA’s treatment of investment and innovation under sharper scrutiny.
Second-order effects
- To preserve the transaction, Microsoft would need to contest the ruling or alter the deal to address the CMA’s cloud-gaming concerns, rather than rely on approvals elsewhere.
- The decision signaled to large game-platform operators that UK review could independently determine the shape of global transactions, raising the importance of cloud distribution commitments in merger planning.
Third-order effects
- If the CMA continues to intervene at the level of nascent platform markets, remedies and deal structures may increasingly be designed around future access to cloud ecosystems rather than current console market shares.
- The episode points to a more assertive UK role in cross-border technology merger control, though its durability depends on whether subsequent revised deals can satisfy competition concerns without blocking investment.
The trend: This is one data point in the shift toward regulators treating control of emerging cloud and platform distribution as a central competition issue in major technology deals.