Viktor Gyökeres gave Arsenal the lead from the penalty spot after a foul by David Hancko on the Swedish striker.
Julián Álvarez equalised with his own penalty after a Ben White handball, confirmed by VAR. A late spot-kick was then awarded to Arsenal for a foul on Eberechi Eze before being overturned following a VAR review, with Atletico Madrid boss Diego Simeone's presence at the pitchside monitor provoking widespread criticism.
Arteta told TNT Sport afterwards: "Speaking to the boys and understanding the penalty incident for the second goal getting overturned — it was against the rules and I don't understand it. Very upset. There is clear contact. He makes the decision and you can't overturn it when you have to watch it 13 times."
On whether the referee was influenced: "I don't know. That's an answer for him. It's the wrong decisions and it changes the course of the tie."
Despite his frustration, Arteta struck an optimistic note. "There are a lot of positives. A lot of very good things that we did. We are in an incredible position. We have to play in front of our people. It is in our hands."
Gyökeres, speaking to the same broadcaster, reflected on a match Arsenal controlled for long periods before losing momentum.
"I think in the first half we controlled the game quite well. We had a few good opportunities and managed to score. In the second half they started much better and managed to get a goal. It was not easy once they scored — they have the crowd here. We tried to play and get that momentum back that we had in the first half."
"I didn't see either of the penalties so it's difficult to say but that's football. I don't know why they turned the second penalty down — it looks like contact but it's the referee's decision. We know when we play at home with our fans it's going to be different. We just have to do our job and be at our best."
The second leg takes place at the Emirates next week. The winner will face either Paris Saint-Germain or Bayern Munich in the final.