The attack by Microsoft boss Brad Smith on Britain’s independent competition enforcer and an alleged lack of openness in our economy is offensive and wrong.
It says more about how the tech behemoth thinks it can bully governments across the globe into submission than anything else.
The $2trillion (£1.6trillion) Seattle giant, like much of Silicon Valley, is used to throwing its weight around in the United States and circumventing regulators through lobbying and financial power. It plainly believes it is possible to do the same in Britain.
The whole point of the fully independent Competition and Markets Authority (CMA), which is blocking the £56billion takeover of ‘Call of Duty’ gaming champion Activision, is to remove such decisions from the political arena.
Thwarted: Microsoft vice chairman Brad Smith has reacted angrily to the competition and markets authority’s decision to block its takeover of video game maker Activision
To suggest, as Smith has, that there is a lack of oversight, when competition regulators are often summoned to appear before Parliamentary panels, shows ignorance as to how Britain works.
If Microsoft were to win the fight for Activision, it would gain control of 70 per cent of the global gaming cloud computing market.
That would not only deprive users of other platforms, such as Apple and Samsung, of choice but allow Microsoft to dictate the price of such services. It would also be a blow to Britain’s gaming sector.
This is largely an all-American deal. But takeovers in a world where there is valuable British technology and creativity act as a giant vacuum cleaner, sucking up the best gaming creators, intellectual property, copyright and patents.
Centres of innovation ranging from Dundee to Sheffield could be affected. Smith seemed confident that he will get a better hearing from the European regulator, which has engaged directly on the deal, but he is living in cloud cuckoo land.
Brussels has been willing to tread where the American authorities dare not.
It has taken on Apple over its tax arrangements in Ireland and is responsible for enacting the GDPR privacy rules.
The EU has shown greater determination to tackle tech tax avoidance than the UK.
Most outrageous of Smith’s unhinged claims is that somehow the EU is a better place to do business post-Brexit than the UK. Britain is still Europe’s strongest market for inward investment, particularly in science, artificial intelligence and tech.
Moreover, whereas it is almost impossible for foreign firms to conduct takeovers in Europe, the UK is still wide open.
In the last year or so, several of our most treasured pioneering companies, including the £4billion communications satellite pioneer Inmarsat, the £10billion industrial software group Aveva and the submarine sonar detection defence firm Ultra Electronics, have been swallowed by international rivals without CMA interference.
What Smith and his Activision opposite number Bobby Kotick failed to say, as they launched their assaults on Britain’s high standards of governance, is that both companies, and the individuals who run them, have very big stakes in the game.
If Microsoft fails to get the Activision deal done, not only will the company lose out on a new valuable stream of business but it will have to write a cheque for $3billion (£2.4billion) to Activision for failure – the break clause in the deal.
As for Kotick, he stands to collect a payout of $375million (£300million) if the bid gets done.
The strong ruling by the CMA (which can be appealed against) is seen as particularly important because it will inform other competition enforcers around the world.
The contentions by the CMA boss Sarah Cardell that it would harm gamers, players of computer games, and suppress innovation look remarkably solid.
The best chance Microsoft has of forcing through the transaction is in the US, where big tech has been allowed to sweep all before it.
US anti-trust regulators the Justice Department and Federal Trade Commission have been hobbled by the successive administrations, which have had big tech in their rhetorical sights but baulk at taking them on.
Allowing Microsoft to dominate the fast-growing gaming space, even if open access is promised, likely would be a touch too far even for the US’s malleable authorities.
Microsoft and Activision’s co-ordinated pummelling of the CMA and Britain shows how ruthless US corporates can be when thwarted in ambitions to dominate the cloud and cyberspace.