The UK’s competition watchdog has denied acting on the orders of the Federal Trade Commission in the US, as it defended its decision last month to block Microsoft’s $69bn (£55bn) acquisition of the Call of Duty creator Activision Blizzard.
Speaking to MPs on the business and trade select committee, Sarah Cardell, the chief executive of the Competition and Markets Authority, said the body only acts on its own assessment of the validity of a merger.
“We are absolutely not doing the bidding of other agencies, we undertake our own analysis,” Cardell said. “We have independent panel groups who are responsible for those decisions, and take those responsibilities incredibly seriously.”
Cardell was responding to questions from the Conservative MP Bim Afolami, who pushed the chief executive to provide details of the CMA’s communications with the FTC in the run-up to the contentious decision to block the deal.
She said a legal agreement allowed the CMA to discuss specifics with the European Commission but that such a waiver was not in place for the FTC, preventing “detailed conversations” in the latter stages of the merger inquiry.
On Monday, the European Commission decided to allow the same merger. The FTC has sued in an attempt to block it, throwing the ultimate decision to the courts.
“Our standard in the UK is that we have to establish, on the balance of probabilities, that it’s more likely than not that the merger will result in a lessening of competition,” Cardell said.
“The standard in the US is a litigation standard, but the analysis is inherently the same; the evidential base will be inherently the same. That’s also true for the European Commission. Our assessment is then subject to judicial review by the competition appeal tribunal in the UK. That is a rigorous process, and we take that incredibly seriously in making sure that our case is well-evidenced.”
Cardell and the chair of the CMA, Marcus Bokkerink, both vigorously denied accusations that the decision to block the deal had harmed the UK’s international reputation.
“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,” Bokkerink said.
“I would worry about a perception that the UK would allow anti-competitive mergers to go ahead and restrict competition in markets.
“The UK has always encouraged, and it’s the CMA’s duty to support and encourage, open competitive markets. And so all our decisions absolutely are about encouraging and promoting open competitive markets where innovators can flow freely.”
Cardell added: “When we’re looking strategically at the role of the competition authority, we will consider the impact of the decisions that we have made and the impact that has for the UK, including the reputation externally. I believe that strong competition is a very positive signal for the UK.”
