Microsoft’s chief hissy fit-thrower has decided he likes Britain after all

[TLHBO 2,162]

 

From somewhere that is “closed for business” to “a great place to live” in the space of just a few short weeks, it’s hard to know what Microsoft’s chief hissy-fit thrower, Brad Smith, really makes of Britain.

 

Thankfully, it seems the American took the advice of this column to embark on a quiet period of self-reflection after his hysterical reaction to the decision of the Competition and Markets Authority (CMA) to block its £55bn bid for games-maker Activision.

 

After all the bluster, in which Microsoft wrongly claimed that the actions of the CMA “discourages investment”, it now appears to be preparing to bargain with officials.

 

It’s truly desperate stuff from an organisation used to throwing its weight around and getting its own way. Fresh from trying to paint the UK as some sort of anti-business backwater, and threatening to cut jobs here, Smith has had a dramatic change of heart.

 

Having successfully navigated an English channel that had “never seemed wider”, as he put it last month, Smith is back in London sheepishly “in search of solutions”.

 

As for these shores, he has always been “bullish on the United Kingdom as a great place to live, to learn, to build”, he told a conference of industry figures.

 

What twaddle. In backpedalling so quickly, it reinforces how unconvincing his outburst was in the first place.

 

If Smith really seeks some form of détente, then he should show some true contrition and issue an apology to the CMA for the attempts of both Microsoft and Activision to undermine its authority. Only then does he deserve a second hearing.

 

In contrast, the CMA has behaved impeccably. While Smith was throwing brickbats and insults, the regulator’s chief executive, Sarah Cardell, rose above it all to be the personification of calm and reason, laying out the rationale for its decision clearly without being dragged into a war of words.

 

Cardell says the CMA is mindful of the impact that its decisions have on the UK, and its reputation. But she also points out that ultimately its job is to encourage and promote “open competitive markets”.

It’s hard to think of many things that run more contrary to that remit than allowing a $2 trillion tech behemoth to tighten its hold over a market of which it already controls 70pc.

 

Or as CMA chairman Marcus Bokkerink succinctly put it: “I would challenge the premise that there is an impact on international confidence in doing business in the UK and that the best way that confidence is served is by turning a blind eye to anti-competitive mergers.”

 

Similarly, when Smith complains that the regulator’s decision “discourages innovation”, what could be less innovative than buying growth rather than trying to create it?

 

Microsoft’s track record on this front is particularly poor. In an industry with a habit of destroying huge value it has proven to be something of the anti-Midas when it comes to deal-making, writing off a combined $14bn on the bungled acquisitions of mobile phone maker Nokia and advertising firm aQuantive alone.

 

There’s an apparent disingenuous aspect to Microsoft’s protests too that has been missed in some quarters. In the rush to be outraged, the company has been less forthcoming about what else is at stake for both sides.

 

In Microsoft’s case it is on the hook for a $3bn (£2.4bn) break fee if the deal doesn’t happen, while Activision boss Bobby Kotick will lose out on a £300m pay day. Perhaps that better explains why the pair have been so outspoken in their criticism.

 

When Smith talks about wanting to “address” the CMA’s concerns, the regulator should exercise great caution. In the past, too many companies have made a series of promises in an effort to get deals approved, only for such pledges to prove they are barely worth the paper they are written on.

 

There are some valid questions to be asked about the regulatory environment for technology in Britain. The creation of the CMA’s digital markets unit will presumably give Smith and his fellow tech bosses nightmares.

 

There is always the danger of unintended consequences but that’s the case for any regulator and as Cardell has said, the CMA is very mindful of that.

 

Likewise, there’s a risk of fighting the last war, as happened with its decision to block Facebook’s takeover of software firm Giphy, an area that the tech industry and consumers very quickly moved on from.

 

But an attempt to create a more level playing field online versus powerful monopolies is clearly in the public interest and any objective observer would surely welcome the pursuit of greater specialist expertise at a regulatory level.

 

Smith’s sudden change of heart changes nothing. Nor should a meeting he had this week with Jeremy Hunt.

 

The underlying principle of the CMA’s status is that it is independent, which means free from interference, not free from oversight or scrutiny.

 

The watchdog’s appearance before the business and trade select committee to answer questions about its decision just weeks after the event is pretty firm evidence of accountability.

 

Ultimately, the outcome of this saga will be decided by Justice Marcus Smith, the judge tasked with overseeing Microsoft’s appeal against the ruling. It is vital for the integrity of an important institution, as well as the future of British technology and entrepreneurship that the CMA’s verdict is upheld.

 

In the meantime, as an alternative to spending £55bn on Activision, Microsoft could set up a live stream into Smith’s office and charge people to watch his tantrums. They could make millions from that sort of entertainment.

 

https://www.telegraph.co.uk/business/2023/06/08/microsoft-activision-britain-competition-jeremy-hunt/

 

Little Dick Brad Smith just got destroyed

 

Lemshits thought he was going to stand up to the UK....instead he's sucking up

[Tears of the Cows 1,212]

Will bump when the deal goes through. 

[Tears of the Cows 1,212]

On 2023-06-08 at 8:27 AM, Tears of the Cows said:

Will bump when the deal goes through.