CMA is like an ‘aggressive chihuaha’, says Elon Musk confidant
The Competition and Markets Authority (CMA) is acting like a small “chihuahua” in its “aggressive” interventions to block deals, one of Silicon Valley’s most high-profile tech chiefs has claimed.
David Sacks, a confidant of Elon Musk and former operating chief of Paypal, said the competition watchdog’s sluggish decision-making risked leaving firms in “limbo” and meant companies were “less likely to do deals”.
“The UK, they’re like the chihuahua who’s leading the pack. They’re the smallest market but they’re the most aggressive on antitrust enforcement,” Sacks said on the All In podcast, which he co-hosts.
“If you’re a start-up and you’re trying to consider where to put your Europe office, I would not choose the UK any more.
“I used to think that the UK was No 1. because it was so easy, but you don’t want to create that nexus if you can help it. It might subject you to a competition authority you don’t want to deal with later when you get acquired.”
Sacks also warned the length of the CMA’s decision-making could have a “chilling effect” on dealmaking and investment in the UK.
The comments mark the latest tirade against the watchdog after it moved to block a number of blockbuster deals last year on the grounds that they would hamper competition and hurt consumers in the UK.
Microsoft chair Brad Smith launched a tirade against the body when it stepped in to initially block the $69bn acquisition of Activision Blizzard, describing the move as the “darkest day in our four decades” in the UK. The CMA later approved the deal after some of the concerns were addressed.
In November last year, the watchdog said it would reject the $20bn tie-up between Adobe and Figma on the grounds it would threaten competition in the product design, image editing and illustration markets. The EU’s competition regulator issued flagged the same concerns against the deal.
The timelines of the decision were criticised by the firms involved, with Adobe saying the watchdog should “move more quickly”. The CMA’s formal investigation into the deal was launched in May and was dropped in December after the two firms abandoned the deal.
A CMA told City A.M. today that “complex mergers need thorough investigation” and the businesses merging “need the opportunity to make their arguments, which all takes time.”
“Ultimately, the merger process is a two-way street — the quicker businesses provide information, the better,” the spokesperson added. “There is also a fast-track process, which merging businesses can apply to. There is no incentive for the CMA to prolong investigations longer than needed.”