The Spaniard was left incensed by Leandro Trossard’s two yellow cards and clearly made his feelings known on the booking for delaying a restart.
Trossard is the second Arsenal star to see red for kicking the ball away after Declan Rice was also caught during the draw against Brighton last month.
Arteta was particularly angered by what he perceived to be a double standard by the official after Jeremy Doku was not cautioned for kicking the ball away earlier in the half.
Key, who has been a vocal critic of Arteta's touchline antics in recent seasons, defended the Gunners boss on this occasion and claimed that Oliver 'dropped a b****ck'.
Richard Keys has sided with Mikel Arteta after the Arsenal boss fumed at a decision by Michael Oliver
The official dismissed Leandro Trossard (second from left) for time wasting just before the interval against Man City
Arteta was left incensed after seeing Arsenal suffer a second red card for the same offense this season
'I do agree with Arteta that Doku should’ve been booked.' The former Sky Sports presenter wrote in his blog. 'He too kicked the ball away, but let’s not forget it would’ve been a simple yellow.
'Trossard was on a yellow when he committed his crime. The guy must have the brains of a rocking horse. There’s no question Oliver dropped a b****ck by not booking Doku. We want consistency.'
In a feisty encounter, City boss Pep Guardiola was also unhappy with the official for his actions which led to Riccardo Calafiori’s equaliser.
Oliver had asked both captains, Bukayo Saka and Kyle Walker, for a word before a free kick and the Manchester City right back was out of position when Arsenal restarted play.
Guardiola admitted that City were disorganised but felt they were hampered by Oliver.
The City boss said: ‘My concern is when the referee asks Kyle to go 20 miles away from his position... next time I will say to my players that the next time the referee asks to talk, say "no no, come here to me" and we will not go.’
Keys was also sympathetic to Guardiola's protestations and said that Oliver was 'a bit naughty' in allowing the visitors to take their free-kick quickly.
City were also upset with Oliver, who allowed the Gunners to take a quick free-kick shortly after he had asked both captains, Bukayo Saka and Kyle Walker, for a word
He added: 'There’s an argument Arsenal’s second should’ve been disallowed. Ederson is clearly stopped from getting to the corner by two Arsenal ‘blockers’. They do it all the time and I’m a little surprised officials haven’t cottoned onto it yet. I thought it was a foul.
'So both sides have reason to be a little miffed, but I enjoyed the game. It was great to see Arsenal go toe-to-toe with City, whilst also believing they could win it. That was a massive change in their mind set from last season.'