Microsoft and Activision just received a powerful new ally in their quest to finalize their merger acquisition deal. It’s no less that the prime minister of the UK.
Rishi Sunak, who has been prime minister since October 2022, is under heavy pressure to live up to his campaign promises of running a pro-business government. At the end of April, when CMA revealed that they had ‘prevented’ the Microsoft – Activision deal from pushing through, Microsoft president Brad Smith, in an interview with the BBC, made a scathing statement about the UK government, claiming that the decision was ‘bad for Britain’, ‘a message that will discourage innovation and investment in the United Kingdom’, and ‘the darkest day in our four decades in Britain.’
The statement had such an impact that the head of the CMA (who we should clarify, was not part of the group that decided on the Microsoft – Activision deal) and Rishi Sunak’s office felt compelled to share responses.
Now, PM Sunak shared a new message on his LinkedIn page. As reported by IdleSloth, Sunak claims he wants to “make it as easy as possible for British businesses to thrive.”
Sunak’s message directly and indirectly referring to the CMA, in talking about his office’s planned reforms to government regulation.
Sunak also links to the official UK government website announcing their new deregulation measures. To quote from their press release:
“Stimulating innovation, investment and growth by announcing two strategic policy statements to steer our regulators.
We are today publishing the first of these statements for consultation, on energy policy, which will be followed soon after by the Government’s strategic steer to the Competition and Markets Authority (CMA).”
Neither Sunak nor the official press release elaborates on what they mean by ‘strategic steer’. But another passage on the new measures they are putting through may give us a clue:
“Ensuring regulation is, by default, the last rather than first response of Government by reforming the Better Regulation Framework. The new, smarter framework will ensure future regulation of our changing economy is streamlined, minimises business burdens, and puts forward-looking regulation at the heart of Government decisions.”
It is possible that the Better Regulation Framework includes changes to the CMA. Based on how Sunak’s office has described it, they were already thinking about this for quite some time.
Given that Brad Smith’s BBC interview grabbed quite a bit of attention, Sunak is likely to have included the Microsoft – Activision deal in his CMA agenda as well.
As a rule, the CMA makes their decisions on regulatory matters independently from the rest of government. In this case, however, Microsoft and Activision pitch a real and convincing case that their deal being blocked would be harmful to the country, and was clearly a mistake.
It’s in situations like this that CMA’s choices can and do get checked and corrected. We don’t know to what degree Sunak will intervene, but it definitely sounds like he was paying attention to the president of one of UK’s biggest cybersecurity partners.
