Microsoft boss changes tune after criticism of UK

Microsoft's president, Brad Smith, has rowed back on criticism he made last year that the UK was "bad for business".

Mr Smith made the comments after the competition watchdog initially blocked the tech giant's planned takeover of the gaming giant Activision Blizzard.

He said people's confidence in the UK had been "severely shaken".

But he has now said the Competition and Markets Authority, which went on to approve the deal, was "tough and fair".

"It pushed Microsoft to change the acquisition that we had proposed, for Activision Blizzard to spin out certain rights that the CMA was concerned about with respect to cloud gaming," Mr Smith said in an interview with the BBC.

In April last year, the CMA blocked Microsoft's acquisition of Activision over concerns it would reduce innovation and mean less choice for consumers in the fast-growing cloud gaming business.

Microsoft owns the Xbox gaming console while Activision Blizzard produces games including the popular Call of Duty series.

At the time of the original rejection, Mr Smith also suggested it made the European Union a more attractive place to do business.

It was a blow for the UK government which wants the country to become a tech powerhouse.

The regulator gave the deal the green light in October after Microsoft restructured its offer.

Mr Smith told the BBC: "I think the CMA vindicated its position but still created a pragmatic path forward for innovation and investment. I think that is good for everyone."

However, the boss of the competition watchdog, Sarah Cardell, criticised Microsoft for its conduct, stating in October: "Businesses and their advisors should be in no doubt that the tactics employed by Microsoft are no way to engage with the CMA."

She said: "Microsoft had the chance to restructure during our initial investigation but instead continued to insist on a package of measures that we told them simply wouldn't work. Dragging out proceedings in this way only wastes time and money."

Microsoft's plan to buy Activision Blizzard - the largest takeover in the history of the gaming industry - was originally announced in January last year.

However, it proved controversial and received a mixed response from regulators around the world.

Microsoft submitted a restructured deal for the competition watchdog to review in August 2023.

Under the new offer, Microsoft agreed to transfer the rights to stream Activision games from the cloud to Ubisoft, the French video games publisher, for 15 years.

It means gamers who prefer rival consoles other than Microsoft's Xbox, such as Sony's PlayStation, can still stream games such as Call of Duty, Overwatch and World of Warcraft from the cloud.

In his interview with the BBC, Mr Smith also highlighted Microsoft's £2.5bn commitment to invest in AI infrastructure in the UK over the next three years, and the UK government's "critical" AI Safety Summit held in November, which he attended.

"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.

"That, I think, adds up to a strong year. And it's a good reminder - sometimes it's more important to think about how the year ends than what happened on a particular day called the 26th of April."