Microsoft in the crosshairs: Allowing big tech to ride roughshod over potential rivals, is a distortion to free markets, says ALEX BRUMMER

Corporations do not grow into £2billion behemoths by accident.

What Microsoft wants, Microsoft gets. The assumption is that the tech giant’s back-channel deal with Sony, main opponents of its proposed £54billion takeover of gaming group Activision Blizzard, will blast a path through the anti-trust objections.

Microsoft agreed that if its pursuit of Activision is successful, it will license its emblematic game Call Of Duty to PlayStation console maker Sony for another decade.

The calculation is that the cosy deal with Sony will clear the way for America’s Federal Trade Commission and Britain’s Competition and Markets Authority (CMA) to tame their objections.

The FTC has already been overruled by a Federal judge in San Francisco over its decision to block the Activision takeover. 

Peace offering: Microsoft agreed that if its pursuit of Activision is successful it will licence its emblematic game ‘Call of Duty’ to PlayStation console maker Sony for another decade

It is seeking to appeal the court ruling. The CMA was the first of the big competition regulators to block the deal, but has since sued for peace.

Sony had good reason to fear Microsoft’s control of Activision as Call Of Duty directly generates £1.2billion of income each year. 

The income would be many times higher if the value of subscriptions services and other add-ons are included.

FTC chairman Lina Khan and the chief executive of Britain’s CMA, Sarah Cardell, initially won great praise for their willingness to stand up to the might of Microsoft. 

But after the US federal court ruling, Khan, who had backing from the Biden administration, has been left to twist in the wind. 

Cardell, who sloughed off claims by Microsoft’s Brad Smith that the CMA decision was bad for Britain, agreed to engage with Microsoft.

No regulator or politician really wants to be on the wrong side of Microsoft, which is responsible for jobs and heavy investment in tech on both sides of the Atlantic.

There are bigger issues at stake in this tug-of-war. The idea that two of the major producers of gaming consoles should carve up access to the largest gaming creator is anti-competitive. 

Open access should mean just that, and allowing Microsoft to set the terms and access to gaming licences is absurd. It effectively means that the biggest beasts could lock out other future console makers and stifle innovation in the age of AI.

Paradoxically, the European Commission, having nodded through the Activision deal, is now pursuing Microsoft over unfairly directing users of its Office software to its Teams video conferencing app.

The decision to pursue the company follows complaints by another video provider, Slack (now owned by Salesforce). It would presumably also work against the interests of Zoom, Face Time, Skype et al. 

Allowing big tech to enable its systems so as to ride roughshod over potential rivals is a distortion to free markets. Regulators need to be alert to Microsoft’s potential for mischief.

Green light

The short-termism of UK boards knows no bounds. The website of £8billion UK asset manager Gresham House boasts a history dating back to 1857. 

Under the current leadership team, which bought out the firm nine years ago, Gresham has prospered by focusing on alternative technologies such as renewable energy and battery storage. 

These are precisely the kind of assets Chancellor Jeremy Hunt wants to nurture as Britain becomes a tech hub, and would fit very well with Labour’s green new deal.

Instead, in their wisdom, chairman Anthony Townsend and chief executive Tony Dalwood, have chosen to throw in the towel and sell-out to US private equity outfit Searchlight Capital Partners for £437million. Aviva Investors rightly are unhappy.

London loses another stock market listing, executives fill their boots and an investor in green technologies sells its soul.

Fixing the odds

Readers of Rory Smith’s 2022 book Expected Goals will recognise the value of high-tech sports analytics. It explains how football clubs such as Brighton & Hove Albion have come from nowhere to punch above their weight in the Premier League.

Sports analytics are hugely valuable to the gambling industry. So it makes sense for betting group Entain to spend big on US analytics firm Angstrom Sports for £122million. It is seeking to embrace the US market through its BetMGM joint venture.

The intelligence gathered will be particularly valuable in the market for in-play bets and parlay (where the risk is spread by making two separate wagers.) All good for Entain, but, one suspects, less advantageous to the punter.

This post first appeared on Dailymail.co.uk