Call of duty? Why yes, prime minister

Oh, for the return of Yes, Prime Minister. It’s more than three decades old, but there’s no shortage of current material for modern successors to hapless premier Jim Hacker and the ingenious, manipulative permanent secretary Sir Humphrey Appleby.

Take the Competition and Markets Authority (CMA) and its attitude to Microsoft’s $69bn (£56bn) merger with Activision Blizzard, owner of hugely popular gaming franchises, including Call of Duty, Overwatch and Candy Crush. The UK regulator, headed by a formidably independent-minded lawyer, Sarah Cardell, does not like the deal one little bit. So, the CMA blocks it.

This, despite other competition authorities, notably the EU, unconditionally clearing the marriage. Among the world’s major regulators, only Lina Khan in the US sides with Cardell. But there, the process is different, and Microsoft is able to rush to court to seek clearance.

The UK is isolated. This, too, at a time when Rishi Sunak and his government are desperate to convince the world that the UK loves big tech. UK innovators have been and gone, heading overseas for funding, to merge and seek stock market listings. The UK wants to stop the rot and secure investment from overseas.

Nevertheless, there’s Cardell, sending a very different message. Brad Smith, Microsoft’s president, describes the block as “bad for Britain” and denounced the CMA as “unelected and unaccountable”. He tells the BBC: “This decision, I have to say, is probably the darkest day in our four decades in Britain. It does more than shake our confidence in the future of the opportunity to grow a technology business in Britain than we’ve ever confronted before.”

Ouch. One response is to say, well he would say that, wouldn’t he. Microsoft does not get what it desires, so Smith goes for the jugular. In acting how it did, the CMA is merely reflecting what many around the world think – that big tech is getting too big, too all-encompassing and anti-competitive, and the playing field must be levelled in favour of the ordinary person.

The regulator insists it’s “pro-business and pro-growth” but will also say its policies have benefited consumers in the past three years to the tune of £2bn.

Another is to worry about Smith’s words going around tech-land (and not just games and software but the whole gamut of hardware, pharmaceuticals, finance, AI – you name it, tech applies to them all and more).

Microsoft is not alone. Will Shu, founder of Deliveroo, claimed the CMA treated him “like a criminal” for taking $500m from Amazon. Sir Jim Ratcliffe said it was “driving business out of the UK” after it halted his attempts to buy a cement maker. And David Wadhwani, the executive leading Adobe’s $20bn acquisition of design start-up Figma, complained about the slow pace of regulatory approval.

That was in April this year. Then last week, the CMA gave the green light. Microsoft agreed to sell the cloud-streaming rights for the games it was acquiring and Cardell was happy.

So were Microsoft and Activision. Smith said: “We’re grateful for the CMA’s thorough review and decision today. We have now crossed the final regulatory hurdle to close this acquisition, which we believe will benefit players and the gaming industry worldwide.” Activision described the CMA’s approval as “great news for our future with Microsoft.”

Cardell, though, could not help herself. Lest there be any doubt that her organisation was pressured into relenting, she added a sting, saying:

“We take our decisions free from political influence and we won’t be swayed by corporate lobbying.

“Businesses and their advisors should be in no doubt that the tactics employed by Microsoft are no way to engage with the CMA. 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.”

Eyebrows shot up. Watchdogs are not normally so outspoken. “That’s quite an unusual thing for the head of a competition authority to say,” said Gavin Robert, senior consultant at Euclid Law and a former CMA panel member. “I think the CMA is worried that people think it’s lobbying that allowed [Microsoft] to get the case through.”

Cue the latest incarnation of Jim Hacker and Sir Humphrey. It’s easy to imagine Sunak shaking his head at Cardell’s comments, especially as she went on to say, the CMA “made sure Microsoft can’t have a stranglehold over this important and rapidly developing market.”

Far from being on the side of boosting the UK economy, the CMA chief was too much pro-consumer, pro-choice. Highly commendable, but not if you wish to woo the overseas money folk to your country, not if you’re susceptible to their charms, speak their language and share their views.

Sunak is a passionate tech advocate; holder of an MBA from Silicon Valley’s alma mater, Stanford; owner of a £5m penthouse in nearby Santa Monica; husband of the daughter of a tech billionaire, herself a Stanford alumnus.

She needs bringing down a peg and some, does Cardell. We can’t have her damaging the UK’s reputation among the greatest visionaries, the most successful business brains on the planet. Something must be done.

“Well, prime minister, you do realise you control the CMA?”

“Surely, it’s entirely independent?”

“Yes, prime minister, but you have the ability to water down its powers.”

“Do I?”

“Yes, prime minister.”

The Digital Markets, Competition and Consumers Bill is wending its way through parliament. It was to have enabled Cardell’s body to dish-out billions in fines. The tech firms would like increased ability to appeal. They are pushing for a broader judicial review procedure, challenging and overturning CMA decisions. Suddenly, they may well find they are going to get their wish.

Certainly, Baroness Stowell, chair of the Lords’ Communications and Digital Committee has been prompted to write to Sunak urging him to resist the “undermining” of the proposed CMA powers. 

Cardell is discovering who is boss; meanwhile the UK is saying loud and clear to the tech giants, “don’t be swayed by her, we’re open for your business”. Genius.