By Sarah Young
LONDON (Reuters) - Competition is key to innovation, the head of Britain's antitrust authority told conference delegates on Thursday, a day after the watchdog said it would review a deal announced this week to create Britain's biggest mobile operator.
Vodafone (LON:VOD) and CK Hutchison on Wednesday agreed the $19 billion tie-up, which will be subject to scrutiny from the Competition and Markets Authority (CMA).
The CMA faced criticism from Microsoft (NASDAQ:MSFT) earlier this year after vetoing the U.S tech giant's acquisition of "Call of Duty" maker Activision, the world's biggest ever gaming deal.
Without mentioning that deal specifically, the CMA's CEO Sarah Cardell used a speech at a conference at the University of East Anglia on Thursday to argue that competition is key to innovation and promoting Britain's economic growth.
"Competitive markets spur firms to operate efficiently, to invest, and to innovate, so that they can maintain and build their market share by providing consumers with better or lower cost products," she said.
"The argument that enforcing open and fair competition is bad for innovation, is like saying football can only flourish without referees."
Cardell highlighted that in fast-growing markets in particular there was a risk that market leaders consolidate power, making it harder for innovative challengers. While the gaming sector is growing rapidly, the mobile telephone industry is struggling to expand.
Microsoft is appealing the CMA's decision, with the appeal due to be heard next month and a verdict likely in August or September. Vodafone and Hutchison are due to present their plans to the CMA in the coming weeks.