Given Microsoft's and Activision's respective dominance in their markets, Microsoft could ignore the regulators and keep doing business in the country.
The British economy cannot work without Windows PCs, the Office suite, and Azure and OneDrive. And banning Microsoft and Activision's games would piss off half of the under 30 crowd, and by proxy, their parents. It would also be unprecedented for any country to do that.
> Microsoft could ignore the regulators and keep doing business in the country
No it can't. You are immediately cutoff from payment and transaction systems and you have no legal basis for selling anything in the country.
On top of that, there's the obvious factor of being it very simple to completely block you online.
Another example, you may not be aware of it, but many companies can't do business in Europe or European countries. E.g. several US media outlets don't want to comply with European privacy laws.
If they can't do business in a country they can't, simple as that.
Even the rest of your comment is even more ridiculous.
A company trying to force its hand against legislation like that is a business-harakiri. You can't possibly think such stuff isn't looked upon by other business actors and governments.
What MS could do, and would make sense, is to just withdraw from the UK Market.
I know they won't actually do that, but it would seem they would make more money in the US, Canada, EU and other countries that approve the deal, than they would if they ignore the deal and stay in the UK.
Besides which, the UK would relent and ask them to come back anyway.
You make it sound like any government should be able to cut ties with any company at a whim.
Microsoft and Apple dominate the desktop market, with Microsoft in a commanding lead.
Imagine if the UK government said no one could buy SQL Server, use Excel, or buy new windows machines.
People and companies would have to spend unimaginable amounts of time learning and migrating to alternative tools while at the same time angry at the government for telling them they can't use the tool of their choice.
The same is true for Apple. If the UK government said Apple could no longer do business in the UK, the UK economy would be crushed.
> You make it sound like any government should be able to cut ties with any company at a whim.
Well, yes. An individual company should absolutely not be more powerful than an entire state. Yes, migrating away from Microsoft would be painful and expensive, but it must be possible, otherwise Microsoft can get whatever it wants from the UK on pains of pulling its business.
It's not just the UK. Munich famously tried to get away from Microsoft and failed. The reasons aren't entirely clear to me - rumor has it it's because of some deals behind closed doors - but I think it's obvious that many governments on all levels are fully dependent on Microsoft. I believe China is headed towards independence of Microsoft, though.
I work for a non-UK company that has some online customers in the UK and in the EU. We have to collect each country's VAT on those sales.
Before Brexit we used the VAT MOSS system, which allows non-EU companies to register in a single country, collect the appropriate VAT on EU sales, then quarterly send the total VAT collected and a form showing total sales for each country to that single country's tax folks, and that country deals with distributing the VAT to the separate countries.
Post Brexit vote we continued to use VAT MOSS (which has since been renamed to something else that I'm failing to remember) although we switched our registration from the UK to Ireland [1] just in case the UK did something stupid and failed to negotiate a Brexit deal in which they remained part of the VAT MOSS system.
They in fact did fail to remain in the VAT MOSS system, and so we had to register with the UK for VAT. They told is that the tax office was a bit busy dealing with Brexit so it might take a while to actually issue our VAT registration number, which we need in order to actually pay collected VAT to them. They said that until then we should collect VAT, but not call it VAT, and hold on to it.
That was over 4 years ago and we are still waiting.
A country that for 4 years and counting has to tell businesses to not remit collected taxes because that country cannot manage to issue the registration numbers that would allow those businesses to file their tax reports is not a country that instills confidence that they could handle something that is actually hard like switching OS/office suite/cloud.
[1] In retrospect, we should have used Ireland from the start. Getting registered in the first place for VAT MOSS in the UK had involved a lot of paperwork and time, and the quarterly filings required submitting separate spreadsheets for the UK and the rest of the EU.
Ireland registration took a few minutes online. To file we just copy/paste the data from our quarterly VAT report script into a text box on a web form and submit it.
And the UK would fine them in excess of any profit generated, and there is the potential for senior MS executives to go to prison, and even possible extradition.
There is absolutely no prospect of Microsoft deciding to try and do that. Nil. None.
Because the UK is going to impose extortionary penalties on one of the largest corporations of its no. 1 geopolitical ally at a time when it needs the US more than ever (trade, AUKUS, Ukraine/NATO, F-35s, etc.) and jail their execs. Rishi Sunak would never allow that to happen.
> a time when it needs the US more than ever (trade, AUKUS, Ukraine/NATO, F-35s, etc.)
Putting aside that there’s technology from UK companies in the F-35 (Rolls contributed to the lift fan in the B model, Martin-Baker ejection seats etc), the US needs AUKUS (as a bulwark to China) and the UK’s contribution to NATO (cf AUKUS and add Russia to the mix) more than the UK does, especially in a post-Brexit world where the UK’s influence is significantly diminished.
The EU are also still looking at the deal, with the potential of imposing licensing requirements [1].
Sure, but if the fine is non trivial, Microsoft could file a lawsuit. It would also be a bad look for Britain to effectively extortionate foreign firms to keep doing business in the country. Whether it's called a "legally approved levy under xyz law" or a bribe to the government is beyond the point. It's the kind of thing you see in corrupt third world countries.
> The British economy cannot work without Windows PCs, the Office suite, and Azure and OneDrive
I would expect that much of the British Government, including its armed/security forces, rely on those MS products and services. As such, I think that telling a big major US ally "tough luck, you're on your own right now" in the middle of this very tense global political climate is not in the best interests of Microsoft the US company.
> Microsoft could ignore the regulators and keep doing business in the country.
Openly breaking the law sounds like a great plan. Do you have a podcast with other great tips like this? E.g. "just don't pay taxes" or "you can steal stuff when nobody is looking".
The British economy cannot work without Windows PCs, the Office suite, and Azure and OneDrive. And banning Microsoft and Activision's games would piss off half of the under 30 crowd, and by proxy, their parents. It would also be unprecedented for any country to do that.