The Microsoft / Activision Blizzard acquisition |OT| Antitrust Simulator (completed; discussing post-merger issues)

LD50 · Feb 3, 2023

Marossi said:
Lol.

If only ever single piece of media that ended up being delayed or didn't hit high quality by critics were fragments of mismanagement. Alas, you don't see anyone claiming that. Because it is not. It's somewhat common ocurrences for any creative project, ESPECIALLY when the pandemic delayed literally every companies projects. But here we are with people coming with the mental gymnastics to fit these as a sign of "mismanagement" just so they can justify their baseless "Microsoft can't manage studios" narrative.

With each new update, comes a new batch of people with the mental gymnastics to try to somehow prove why this acquisition shouldn't go through.

Just want this acquisition to be over with. Next week can't come soon enough.

To put it simply, the subject wasn't other media, it was about Xbox. I am in no way using that as an argument for why the acquisition shouldn't go through. I am merely suggesting that utilizing older, successful methods to gain marketshare may still be effective presently and bring results, regardless of this or future acquisition targets. We've all made our arguments for or against ABK, it's in regulators hands now.

In Amber Clad · Feb 3, 2023

Let's not do big, multi-page details over things that are barely tangentially-related at this stage, please.

If you want to talk about general Xbox first party strategy, there's a specific thread for that, and it ain't this one.

Deleted member 6235 · Feb 3, 2023

edit: did not see the mod message!

Deleted member 93062 · Feb 3, 2023

ceej said:
You're right, no other platform holder has ever had a delayed game or a botched launch.

I wrote multiple posts about it and explicitly addressed this kind of response from other people of boiling down a pattern of mishaps to "delayed a game" or "botched a launch". You can read those if you want my take on your statement. I said I was moving on since it was off topic.

Ambient80 · Feb 3, 2023

EZMode said:
We probably won't hear anything until next week

What_a_pisser.gif

Oh well, next week it is, then! (Assuming no more delays lol)

gofreak · Feb 3, 2023

cyrribrae said:
It is literally the same spice as always, though :p

I'm pretty sure there is not a single soul in this thread that has argued that MS needs COD to survive in the industry. What we have argued is that MS needs something more than what they're doing now that challenges the fundamental position of the incumbents if they ever hope to be on an "even playing field" with PlayStation without Sony yeeting themselves into the sun (or accidentally incite some gamer riot or whatever). ABK is an example of that. And it's an example that is so large that it is truly incomprehensible - and YET EVEN SO, we are arguing that it would STILL not completely reverse the power dynamics in this industry.

I have trouble believing that many of the people in this thread actually believe that Sony would be unable to compete if MS owned ABK and still published every single COD on PlayStation for 10 years. Like. None of you think that. And none of you believe that Sony couldn't find a response to COD (again, less than 6% of their revenue) going exclusive with 10 years of notice. THAT would be evidence of mismanagement.

What we're arguing is not that MS needs COD. It's that MS needs something at COD's scale - and probably even more on top of that. And we think it's ludicrous to suggest that MS is going to get there by localizing more games (it is), funding more exclusives (it is), moneyhatting some games (it is), marketing more (it is, maybe less now), Game Passing harder, or whatever else business-as-usual suggestion has been given. The evidence and logic just do not add up. Meanwhile we're seeing evidence that MS's acquisitions have helped with rehabilitating their image, improving the work environment (along with broader culture shifts, though not without issues), and regaining market share. That's good for everyone in the industry and for players. And none of it has hurt Sony whatsoever.

Respectfully, you're re-framing the discussion we were having. The post I was responding to was neither about what MS needs to survive, nor was any of my counter argument relating to Sony needing CoD to survive. I was responding to the premise that if the deal was blocked there was no hope of anyone challenging Sony. Someone did say that. I was responding. I don't think anything I said was unreasonable, and I don't really fancy engaging with a reframed version of that designed to make it seem like my comments were unreasonable.

vixolus · Feb 3, 2023

View: https://twitter.com/leah_nylen/status/1621557831760486401?s=20

Merger Remedies Proposals to Face ‘Skeptical’ FTC, Official Says

The Federal Trade Commission will be “skeptical” about companies’ business divestiture offers made as a remedy in antitrust regulators’ merger approval, an agency official said.

news.bloomberglaw.com

As they undergo merger review, companies often agree to sell off a business unit—typically the units that would overlap after merger closure—to a third-party company in hopes of easing regulators' competition concerns. Remedies are getting increasingly complex, Vedova said.

The FTC, under Chair Lina Khan, has increasingly resisted classic merger remedies, pointing to high-profile divestiture failures and research showing nearly a third of recent remedies either failed or didn't restore competition with sufficient speed.

The bureau will not consider risky remedies, where divested business units can't stand alone or buyer-seller entanglements exist, Vedova said at the GCR Live: Law Leaders Global conference in Miami.

"Our approach today is that the Bureau of Competition will only recommend acceptance of divestitures that allow the buyer to operate the divested business on a standalone basis, quickly, effectively and independently, and with the same incentives and comparable resources as the original owner," she said.

Agency staff will enforce strict deadlines on parties to submit credible divestiture offers, Vedova said.

"We're not going to engage in extended negotiations that sometimes drag on for months as parties haggle with us over what is the right package of assets to create a standalone business," she said.

We will only accept structural divestitures if the divestiture is essentially a fully functioning unit with all comparable resource and incentives as before the buyout? Wut? Then what's the point of the buying from the parties involved if the divestiture requires such conditions to be met? Seems like a catch-22.

Like when FOX Sports spun off Bally Sports as a divestiture... that wouldn't be enough because... Bally can't compete effectively because it doesn't have the same resources as FOX Sports did? Like.. no shit?

christocolus · Feb 3, 2023

vixolus said:
View: https://twitter.com/leah_nylen/status/1621557831760486401?s=20

Merger Remedies Proposals to Face ‘Skeptical’ FTC, Official Says

The Federal Trade Commission will be “skeptical” about companies’ business divestiture offers made as a remedy in antitrust regulators’ merger approval, an agency official said.

news.bloomberglaw.com

We will only accept structural divestitures if the divestiture is essentially a fully functioning unit with all comparable resource and incentives as before the buyout? Wut? Then what's the point of the buying from the parties involved if the divestiture requires such conditions to be met? Seems like a catch-22.

Like when FOX Sports spun off Bally Sports as a divestiture... that wouldn't be enough because... Bally can't compete effectively because it doesn't have the same resources as FOX Sports did? Like.. no shit?

so they are not interested in divestitures?

Windu · Feb 3, 2023

They are interested in losing in court.

christocolus · Feb 3, 2023

Windu said:
They are interested in losing in court.

I guess so. Lol

BringBackSonics · Feb 3, 2023

vixolus said:
View: https://twitter.com/leah_nylen/status/1621557831760486401?s=20

Merger Remedies Proposals to Face ‘Skeptical’ FTC, Official Says

The Federal Trade Commission will be “skeptical” about companies’ business divestiture offers made as a remedy in antitrust regulators’ merger approval, an agency official said.

news.bloomberglaw.com

We will only accept structural divestitures if the divestiture is essentially a fully functioning unit with all comparable resource and incentives as before the buyout? Wut? Then what's the point of the buying from the parties involved if the divestiture requires such conditions to be met? Seems like a catch-22.

Like when FOX Sports spun off Bally Sports as a divestiture... that wouldn't be enough because... Bally can't compete effectively because it doesn't have the same resources as FOX Sports did? Like.. no shit?

I guess to court we will go....and MS to Close when EC/CMA comes back. FTC really wanting another high profile loss.

gofreak · Feb 3, 2023

vixolus said:
View: https://twitter.com/leah_nylen/status/1621557831760486401?s=20

Merger Remedies Proposals to Face ‘Skeptical’ FTC, Official Says

The Federal Trade Commission will be “skeptical” about companies’ business divestiture offers made as a remedy in antitrust regulators’ merger approval, an agency official said.

news.bloomberglaw.com

We will only accept structural divestitures if the divestiture is essentially a fully functioning unit with all comparable resource and incentives as before the buyout? Wut? Then what's the point of the buying from the parties involved if the divestiture requires such conditions to be met? Seems like a catch-22.

Like when FOX Sports spun off Bally Sports as a divestiture... that wouldn't be enough because... Bally can't compete effectively because it doesn't have the same resources as FOX Sports did? Like.. no shit?

I think it's that they would be skeptical of a spin off that left, in that case, Bally sports with comparably fewer resources than it had while operating with Fox as its owner… not necessarily as Fox Sports entirely. Since I guess Bally wasn't monopolising Fox's resources, a new owner wouldn't necessarily have to match Fox Sport's resources in its entirety. Just be able to keep Bally in the manner it was accustomed to, so to speak, or to have 'comparable' resources at its disposal, not necessarily identical.

That sounds like something regulators would always have in theory demanded, but the FTC is signalling that it now is 'just' going to be stricter or more careful about that in practice than maybe they have been. Kind of like an extension of skepticism over behavioural remedies into the structural - they want remedies that are so general or thorough that they don't have to worry about keeping an eye on the situation, or superficial solutions that fall apart past the short term.

I doubt it'll be relevant to MS/ABK anyway. The idea of structural remedies probably never came up in an attempt to avoid the current FTC case, and I doubt MS would be interested in that as part of a settlement either. If other regs wanted some substantial structural remedy, I think you could be getting into walk-away territory, at least by others have been saying.

Shirosaki · Feb 3, 2023

Windu said:
They are interested in losing in court.

Haha, that was exactly my thought when I read this too.

mangrilla · Feb 3, 2023

vixolus said:
View: https://twitter.com/leah_nylen/status/1621557831760486401?s=20

Merger Remedies Proposals to Face ‘Skeptical’ FTC, Official Says

The Federal Trade Commission will be “skeptical” about companies’ business divestiture offers made as a remedy in antitrust regulators’ merger approval, an agency official said.

news.bloomberglaw.com

We will only accept structural divestitures if the divestiture is essentially a fully functioning unit with all comparable resource and incentives as before the buyout? Wut? Then what's the point of the buying from the parties involved if the divestiture requires such conditions to be met? Seems like a catch-22.

Like when FOX Sports spun off Bally Sports as a divestiture... that wouldn't be enough because... Bally can't compete effectively because it doesn't have the same resources as FOX Sports did? Like.. no shit?

My read of this just boils down to - if you're proposing a divestiture to overcome competition concerns in a merger, the business unit you propose spinning off has to actually be able to exist without being a part of it's current structure. If you just spin something off that can't actually survive in the market, it doesn't solve the problem the divestiture is intended to solve in the first place.

So using Bally but going a little hypothetical - Bally was owned by Fox Sports, obviously a large player in the sports broadcasting space. When Disney went to buy out Fox, spinning off Bally was intended to calm FTC competition concerns, Fox Sports merging with ESPN obviously concentrates the broadcast market.

Before the sale, Fox had a position in the market place that carried numerous advantages - the size of the company, synergy with other brands, etc. could help get licensing and broadcasting deals, along with advertising revenue to fund the whole thing. There are pre-existing relationships with cable providers, etc.

Bally's ownership has apparently been rumored to be facing bankruptcy for a while, though I don't really know if that's related to this merger. But on the hypothetical - if Bally was unable to continue at it's level because Sinclair or a hypothetical other buyer was unable to leverage the kind of relationship/infrastructure/content/whathaveyou to sustain it, then divestiture has failed to address the concentration concerns that originally led to the divestiture proposal.

Firima · Feb 3, 2023

Horatio Jones said:
To put it simply, the subject wasn't other media, it was about Xbox. I am in no way using that as an argument for why the acquisition shouldn't go through. I am merely suggesting that utilizing older, successful methods to gain marketshare may still be effective presently and bring results, regardless of this or future acquisition targets. We've all made our arguments for or against ABK, it's in regulators hands now.

Look, Microsoft is free to pursue any legal avenue of growth they so choose in order to gain marketshare. There's little point in trying to rank these processes based on morality or odds of inconveniencing a market leader's playerbase or current fortunes, because Microsoft really shouldn't care about that outside of the chance that angered consumers will just not even bother with them after all is said and done, and the meaningfulness of that potential outcome is probably greatly exaggerated.

Sony wants to finagle with this process to keep Microsoft in the pocket of the existing market paradigm, to keep Microsoft in a position where they need to continue playing Sony's game to survive in this industry. They want this because this is the scenario in which Sony has more control and can better predict Microsoft's potential moves to stay afloat. There's the least amount of uncertainty re: competitors and a more stable continuation of current business practices if Sony can do this. Microsoft, on the other hand, wants to enable themselves to match Sony outside the confines of the existing market paradigm, something Sony realistically can't allow because then Sony has less control over the direction of the market and potential actions competitors can take to remain viable in the market, and having a behemoth the size of Microsoft no longer needing to play by Sony's rules to do well is a nightmare scenario for Sony.

There's nothing wrong with a paradigm shift or major disruption in the vast majority of industries, and we shouldn't reject it in the service of preserving current convenience.

BobLoblaw · Feb 3, 2023

Windu said:
They are interested in losing in court.

The Lulu smoke sure would be something.

LD50 · Feb 3, 2023

Firima said:
Look, Microsoft is free to pursue any legal avenue of growth they so choose in order to gain marketshare. There's little point in trying to rank these processes based on morality or odds of inconveniencing a market leader's playerbase or current fortunes, because Microsoft really shouldn't care about that outside of the chance that angered consumers will just not even bother with them after all is said and done, and the meaningfulness of that potential outcome is probably greatly exaggerated.

Sony wants to finagle with this process to keep Microsoft in the pocket of the existing market paradigm, to keep Microsoft in a position where they need to continue playing Sony's game to survive in this industry. They want this because this is the scenario in which Sony has more control and can better predict Microsoft's potential moves to stay afloat. There's the least amount of uncertainty re: competitors and a more stable continuation of current business practices if Sony can do this. Microsoft, on the other hand, wants to enable themselves to match Sony outside the confines of the existing market paradigm, something Sony realistically can't allow because then Sony has less control over the direction of the market and potential actions competitors can take to remain viable in the market, and having a behemoth the size of Microsoft no longer needing to play by Sony's rules to do well is a nightmare scenario for Sony.

There's nothing wrong with a paradigm shift or major disruption in the vast majority of industries, and we shouldn't reject it in the service of preserving current convenience.

1. Read the Mod Post above.
2. You are talking about something completely different to what I was talking about.

vixolus said:
View: https://twitter.com/leah_nylen/status/1621557831760486401?s=20

Merger Remedies Proposals to Face ‘Skeptical’ FTC, Official Says

The Federal Trade Commission will be “skeptical” about companies’ business divestiture offers made as a remedy in antitrust regulators’ merger approval, an agency official said.

news.bloomberglaw.com

So no, say, CoD up for separate purchase by EA or the likes? Makes sense. That opens up a whole new can of worms no one wants to deal with.

Bizzquik · Feb 3, 2023

BringBackSonics said:
I guess to court we will go....and MS to Close when EC/CMA comes back. FTC really wanting another high profile loss.

My thoughts exactly.
FTC is telling Microsoft they should just close the deal if EC/CMA settlement looks good and then fight with FTC later.

Microsoft: "We're interested in a settlement that is agreeable to you and fair to all parties."

FTC: "No"

Microsoft:

Idas · Feb 3, 2023

The summary of the first report (and most recent one) from Equity Report is here.

This one is from December 14th 2022:

Microsoft’s proposed commitments "unlikely" to appease the CMA

Microsoft will have a hard time convincing the UK’s Competition and Markets Authority (CMA) that its proposed behavioural commitments will be sufficient to address the competition concerns raised by its planned merger with Activision Blizzard, … Microsoft’s proposed commitments “unlikely” to...

www.equityreport.co.uk

- The sources are two UK antitrust lawyers following the case for their clients.

- One of the lawyers says that he was aware that the CMA "had received a significant number of complaints", although he could not confirm the names of the companies involved.

- Both lawyers thought that the agreements with Nintendo and Steam for COD wouldn't be enough for the CMA because historically the CMA has not been supportive of behavioural remedies.

- One of the lawyers thought that there was a chance "higher than 50%" of the deal being blocked by the CMA. He also said that the EC and CMA had been most likely cooperating and that whatever happens the decision would be similar.

- Both lawyers thought that MS could appease regulators by agreeing to licensing ABK's games on FRAND terms (Fair, Reasonable and Non-Discriminatory), but that such an agreement would be commercially unattractive for MS and it's difficult to monitor.

This one is from December 7th 2022:

Microsoft/Activision merger unlikely to face major hurdles in China

The ongoing acquisition of Activision Blizzard by Microsoft is not expected to raise significant concerns in China, two Chinese antitrust partners advising both local and international gaming companies told Equity Report. The first lawyer conceded... … Microsoft/Activision merger unlikely to...

www.equityreport.co.uk

- The sources are two Chinese antitrust partners advising local and international gaming companies.

- Both thought that the deal would not raise significant concerns in China.

- MS has a "pretty good" relationship with China, something that should help. At the same time, any political influence could be ruled out for the case.

- One of them thought that Tencent is big enough to counterbalance any reduction in competition that the deal would lead to. The other one thought that Tencent will still be the market leader after the deal, so it doesn't have any impact on their position.

- One of them thought that the transaction had not attracted much interest from market players in China given that he would usually receive several calls from his clients to discuss high profile cases and he hadn't received any call about MS/ABK.

This one is from January 26th 2023, and only indirectly related:

CMA and EC compare notes on Broadcom/VMware merger case

The UK’s Competition and Markets Authority (CMA) has been exchanging views with the European Commission (EC) on the proposed acquisition of virtualisation software provider VMware by Broadcom, a source familiar with the matter told Equity … CMA and EC compare notes on Broadcom/VMware merger case...

www.equityreport.co.uk

- The source is a lawyer working for the merging parties in this case (Broadcom/VMware).

- The communication channels between the EC and CMA have not been as open as they were before Brexit, but there is some level of cooperation on high profile cases.

- The ABK case, like the Broadcom/VMware or the Booking/Etravel, are mainly about vertical foreclosure concerns. These are complex cases that sometimes can be solved through the in-depth review and where the EC is more willing to accept behavioural remedies.

PS: The Booking/Etraveli case was approved without remedies by the CMA during Phase 1 in September 2022.

VinFTW · Feb 3, 2023

A lot of assumptions that EU/CMA will agree to the deal but I'm not nor have I ever seen anything positive about their findings to indicate they dont just strike the deal dead asap.

Wasnt the whole point of FTC suing because they were on the phone with the EU? Im sure they did that with the knowledge they are also going to deny it.

Deleted member 93062 · Feb 3, 2023

Idas said:
The summary of the first report (and most recent one) from Equity Report is here.

This one is from December 14th 2022:

- The sources are two UK antitrust lawyers following the case for their clients.

- One of the lawyers says that he was aware that the CMA "had received a significant number of complaints", although he could not confirm the names of the companies involved.

- Both lawyers thought that the agreements with Nintendo and Steam for COD wouldn't be enough for the CMA because historically the CMA has not been supportive of behavioural remedies.

- One of the lawyers thought that there was a chance "higher than 50%" of the deal being blocked by the CMA. He also said that the EC and CMA had been most likely cooperating and that whatever happens the decision would be similar.

- Both lawyers thought that MS could appease regulators by agreeing to licensing ABK's games on FRAND terms (Fair, Reasonable and Non-Discriminatory), but that such an agreement would be commercially unattractive for MS and it's difficult to monitor.

This one is from December 7th 2022:

- The sources are two Chinese antitrust partners advising local and international gaming companies.

- Both thought that the deal would not raise significant concerns in China.

- MS has a "pretty good" relationship with China, something that should help. At the same time, any political influence could be ruled out for the case.

- One of them thought that Tencent is big enough to counterbalance any reduction in competition that the deal would lead to. The other one thought that Tencent will still be the market leader after the deal, so it doesn't have any impact on their position.

- One of them thought that the transaction had not attracted much interest from market players in China given that he would usually receive several calls from his clients to discuss high profile cases and he hadn't received any call about MS/ABK.

This one is from January 26th 2023, and only indirectly related:

- The source is a lawyer working for the merging parties in this case (Broadcom/VMware).

- The communication channels between the EC and CMA have not been as open as they were before Brexit, but there is some level of cooperation on high profile cases.

- The ABK case, like the Broadcom/VMware or the Booking/Etravel, are mainly about vertical foreclosure concerns. These are complex cases that sometimes can be solved through the in-depth review and where the EC is more willing to accept behavioural remedies.

PS: The Booking/Etraveli case was approved without remedies by the CMA during Phase 1 in September 2022.

So it's dead at the CMA?

VinFTW · Feb 3, 2023

Sullivan said:
So it's dead at the CMA?

Seems so.

Maybe we can all finally move on lol

Idk how MS will recover from a PR disaster like that tho! A lot of people assume they will have all that money to spend on other acquisitions but realistically all they did was cause bad PR and cost several billion dollars.

Hope im wrong tho

WhiskerFrisker · Feb 3, 2023

Sullivan said:
So it's dead at the CMA?

VinFTW said:
Seems so.

Maybe we can all finally move on lol

Idk how MS will recover from a PR disaster like that tho! A lot of people assume they will have all that money to spend on other acquisitions but realistically all they did was cause bad PR and cost several billion dollars.

Hope im wrong tho

This is equally as silly as every time some kind of small information come out, people rush to say the deals going through. Nobody knows how the CMA is moving at all

Lant_War · Feb 3, 2023

Just saying, but how many times have we had a report say something and then the reality is the complete opposite lol

UraMallas · Feb 3, 2023

It's just a 2 month old article from two lawyers whose client's are probably the ones objecting in the first place.

This changes nothing.

BobLoblaw · Feb 3, 2023

Sullivan said:
So it's dead at the CMA?

If that's all you took out of all that, then sure.

Deleted member 93062 · Feb 3, 2023

WhiskerFrisker said:
This is equally as silly as every time some kind of small information come out, people rush to say the deals going through. Nobody knows how the CMA is moving at all

The line about "One of the lawyers says that he was aware that the CMA "had received a significant number of complaints", is the one that gets me. Having Sony and maybe Google file complaints is one thing, if it's way more than that, I don't see it passing.

headspawn · Feb 3, 2023

It would be impossible for them to divest part of ABK and have the splintered part operate with the same resources it had before.

Psyrgery · Feb 3, 2023

Yup, had my gut feeling that the CMA would outright kill the deal

Trup1aya · Feb 3, 2023

Idas said:
The summary of the first report (and most recent one) from Equity Report is here.

This one is from December 14th 2022:

- The sources are two UK antitrust lawyers following the case for their clients.

- One of the lawyers says that he was aware that the CMA "had received a significant number of complaints", although he could not confirm the names of the companies involved.

- Both lawyers thought that the agreements with Nintendo and Steam for COD wouldn't be enough for the CMA because historically the CMA has not been supportive of behavioural remedies.

- One of the lawyers thought that there was a chance "higher than 50%" of the deal being blocked by the CMA. He also said that the EC and CMA had been most likely cooperating and that whatever happens the decision would be similar.

- Both lawyers thought that MS could appease regulators by agreeing to licensing ABK's games on FRAND terms (Fair, Reasonable and Non-Discriminatory), but that such an agreement would be commercially unattractive for MS and it's difficult to monitor.

This one is from December 7th 2022:

- The sources are two Chinese antitrust partners advising local and international gaming companies.

- Both thought that the deal would not raise significant concerns in China.

- MS has a "pretty good" relationship with China, something that should help. At the same time, any political influence could be ruled out for the case.

- One of them thought that Tencent is big enough to counterbalance any reduction in competition that the deal would lead to. The other one thought that Tencent will still be the market leader after the deal, so it doesn't have any impact on their position.

- One of them thought that the transaction had not attracted much interest from market players in China given that he would usually receive several calls from his clients to discuss high profile cases and he hadn't received any call about MS/ABK.

This one is from January 26th 2023, and only indirectly related:

- The source is a lawyer working for the merging parties in this case (Broadcom/VMware).

- The communication channels between the EC and CMA have not been as open as they were before Brexit, but there is some level of cooperation on high profile cases.

- The ABK case, like the Broadcom/VMware or the Booking/Etravel, are mainly about vertical foreclosure concerns. These are complex cases that sometimes can be solved through the in-depth review and where the EC is more willing to accept behavioural remedies.

PS: The Booking/Etraveli case was approved without remedies by the CMA during Phase 1 in September 2022.

Treating ABK IP like industry essential patented technology deserving of FRAND terms is… lol

christocolus · Feb 3, 2023

Idas said:
The summary of the first report (and most recent one) from Equity Report is here.

This one is from December 14th 2022:

- The sources are two UK antitrust lawyers following the case for their clients.

- One of the lawyers says that he was aware that the CMA "had received a significant number of complaints", although he could not confirm the names of the companies involved.

- Both lawyers thought that the agreements with Nintendo and Steam for COD wouldn't be enough for the CMA because historically the CMA has not been supportive of behavioural remedies.

- One of the lawyers thought that there was a chance "higher than 50%" of the deal being blocked by the CMA. He also said that the EC and CMA had been most likely cooperating and that whatever happens the decision would be similar.

- Both lawyers thought that MS could appease regulators by agreeing to licensing ABK's games on FRAND terms (Fair, Reasonable and Non-Discriminatory), but that such an agreement would be commercially unattractive for MS and it's difficult to monitor.

This one is from December 7th 2022:

- The sources are two Chinese antitrust partners advising local and international gaming companies.

- Both thought that the deal would not raise significant concerns in China.

- MS has a "pretty good" relationship with China, something that should help. At the same time, any political influence could be ruled out for the case.

- One of them thought that Tencent is big enough to counterbalance any reduction in competition that the deal would lead to. The other one thought that Tencent will still be the market leader after the deal, so it doesn't have any impact on their position.

- One of them thought that the transaction had not attracted much interest from market players in China given that he would usually receive several calls from his clients to discuss high profile cases and he hadn't received any call about MS/ABK.

This one is from January 26th 2023, and only indirectly related:

- The source is a lawyer working for the merging parties in this case (Broadcom/VMware).

- The communication channels between the EC and CMA have not been as open as they were before Brexit, but there is some level of cooperation on high profile cases.

- The ABK case, like the Broadcom/VMware or the Booking/Etravel, are mainly about vertical foreclosure concerns. These are complex cases that sometimes can be solved through the in-depth review and where the EC is more willing to accept behavioural remedies.

PS: The Booking/Etraveli case was approved without remedies by the CMA during Phase 1 in September 2022.

so the CMA remains the major threat to this deal...but a lot could have happened since December 14th 2022 till date (February 2023)

Idas What would licensing ABK games on FRAND terms entail?

Zebesian-X · Feb 3, 2023

Gotta rename this OT to "CMA waiting room"

Deleted member 93062 · Feb 3, 2023

BobLoblaw said:
If that's all you took out of all that, then sure.

There's info on three regions (UK/China/EU) and the UK one sounds all negative. Wym "if that's all you took out of all that"? It was all negative.

Edit: seems like the last one is more EU/CMA but doesn't really give much info.

WhiskerFrisker · Feb 3, 2023

Sullivan said:
The line about "One of the lawyers says that he was aware that the CMA "had received a significant number of complaints", is the one that gets me. Having Sony and maybe Google file complaints is one thing, if it's way more than that, I don't see it passing.

Yeah that line is interesting because I wish we knew how many and whom but again we actually don't know how it affects their decision.

BobLoblaw · Feb 3, 2023

Sullivan said:
There's info on three regions (UK/China/EU) and the UK one sounds all negative. Wym "if that's all you took out of all that"? It was all negative.

The last part that Idas posted stated how the EC and CMA still collaborated on other large acquisitions. It also said earlier that they were likely in contact with the EC on this one. We have the SO for the EC, so it's likely that their concerns are mostly the same concerns that the CMA would have. It's just that the recommended concessions/remedies might be different.

Bradbatross · Feb 3, 2023

Sullivan said:
So it's dead at the CMA?

Huh?

gofreak · Feb 3, 2023

Horatio Jones said:
So no, say, CoD up for separate purchase by EA or the likes? Makes sense. That opens up a whole new can of worms no one wants to deal with.

I wouldn't say no, but it would have to be carved out in a way that would satisfy them that it'll be a going concern and without much interruption. I think there are other third parties that could take CoD on, I think it certainly would be a going concern, but I guess the question would be is a buyer available promptly that could take on and integrate, and also would be willing to take on certain associated restrictions (e.g. they'd basically have tolerate being off the table for a MS acquisition for a period of time). CoD aside, other MS/ABK IP probably could be divested with greater ease … like I could easily imagine someone else taking on e.g. a Tony Hawk without too much friction.

Very hypothetical though. I'm not sure MS would want to entertain this if it became a remedy regulators started guiding on… certainly not re CoD anyway.

Deleted member 93062 · Feb 3, 2023

BobLoblaw said:
The last part that Idas posted stated how the EC and CMA still collaborated on other large acquisitions. It also said earlier that they were likely in contact with the EC on this one. We have the SO for the EC, so it's likely that their concerns are mostly the same concerns that the CMA would have. It's just that the recommended concessions/remedies might be different.

Exactly, and the example they give for a possible remedy for the CMA is very unlikely to be accepted by Microsoft.

BobLoblaw · Feb 3, 2023

Sullivan said:
Exactly, and the example they give for a possible remedy for the CMA is very unlikely to be accepted by Microsoft.

Unlikely doesn't mean it's not possible.

Wereroku · Feb 3, 2023

Sullivan said:
So it's dead at the CMA?

Depends. CMA might not kill it outright but if they want structural remedies I don't see MS completing the purchase.

FRAND would be interesting because setting the licensing rate would be crazy and almost certainly much much lower then MS or ABK would charge for it.

Kill3r7 · Feb 3, 2023

gofreak said:
I wouldn't say no, but it would have to be carved out in a way that would satisfy them that it'll be a going concern and without much interruption. I think there are other third parties that could take CoD on, I think it certainly would be a going concern, but I guess the question would be is a buyer available promptly that could take on and integrate, and also would be willing to take on certain associated restrictions (e.g. they'd basically have tolerate being off the table for a MS acquisition for a period of time). CoD aside, other MS/ABK IP probably could be divested with greater ease … like I could easily imagine someone else taking on e.g. a Tony Hawk without too much friction.

Very hypothetical though. I'm not sure MS would want to entertain this if it became a remedy regulators started guiding on… certainly not re CoD anyway.

The hard part is how much does COD cost? Because they won't be selling them for a pittance.

Deleted member 93062 · Feb 3, 2023

BobLoblaw said:
Unlikely doesn't mean it's not possible.

I guess but if this report is true, and it seems like it comes from a reliable source, it doesn't exactly instill confidence in me that the CMA is approving this.

Bradbatross · Feb 3, 2023

Sullivan said:
The line about "One of the lawyers says that he was aware that the CMA "had received a significant number of complaints", is the one that gets me. Having Sony and maybe Google file complaints is one thing, if it's way more than that, I don't see it passing.

They can receive all the complaints in the world, but the CMA is still going to analyze the deal and come to their own conclusion if it's anti-competitive or not. We have no idea who these lawyers are, and it's not like they're saying the deal is 100% getting blocked. They sound just as uncertain as everybody else.

Witness · Feb 3, 2023

Idas said:
The summary of the first report (and most recent one) from Equity Report is here.

This one is from December 14th 2022:

- The sources are two UK antitrust lawyers following the case for their clients.

- One of the lawyers says that he was aware that the CMA "had received a significant number of complaints", although he could not confirm the names of the companies involved.

- Both lawyers thought that the agreements with Nintendo and Steam for COD wouldn't be enough for the CMA because historically the CMA has not been supportive of behavioural remedies.

- One of the lawyers thought that there was a chance "higher than 50%" of the deal being blocked by the CMA. He also said that the EC and CMA had been most likely cooperating and that whatever happens the decision would be similar.

- Both lawyers thought that MS could appease regulators by agreeing to licensing ABK's games on FRAND terms (Fair, Reasonable and Non-Discriminatory), but that such an agreement would be commercially unattractive for MS and it's difficult to monitor.

This one is from December 7th 2022:

- The sources are two Chinese antitrust partners advising local and international gaming companies.

- Both thought that the deal would not raise significant concerns in China.

- MS has a "pretty good" relationship with China, something that should help. At the same time, any political influence could be ruled out for the case.

- One of them thought that Tencent is big enough to counterbalance any reduction in competition that the deal would lead to. The other one thought that Tencent will still be the market leader after the deal, so it doesn't have any impact on their position.

- One of them thought that the transaction had not attracted much interest from market players in China given that he would usually receive several calls from his clients to discuss high profile cases and he hadn't received any call about MS/ABK.

This one is from January 26th 2023, and only indirectly related:

- The source is a lawyer working for the merging parties in this case (Broadcom/VMware).

- The communication channels between the EC and CMA have not been as open as they were before Brexit, but there is some level of cooperation on high profile cases.

- The ABK case, like the Broadcom/VMware or the Booking/Etravel, are mainly about vertical foreclosure concerns. These are complex cases that sometimes can be solved through the in-depth review and where the EC is more willing to accept behavioural remedies.

PS: The Booking/Etraveli case was approved without remedies by the CMA during Phase 1 in September 2022.

Well that sounds like bad news from the CMA. Hopefully the wait isn't long to know one way or the other.

Wereroku · Feb 3, 2023

Kill3r7 said:
The hard part is how much does COD cost? Because they won't be selling them for a pittance.

Not just COD if they want a structural remedy it would most likely either be the Activision section itself as a whole or the COD IP and the studios that work on COD.

LD50 · Feb 3, 2023

gofreak said:
I wouldn't say no, but it would have to be carved out in a way that would satisfy them that it'll be a going concern and without much interruption. I think there are other third parties that could take CoD on, I think it certainly would be a going concern, but I guess the question would be is a buyer available promptly that could take on and integrate, and also would be willing to take on certain associated restrictions (e.g. they'd basically have tolerate being off the table for a MS acquisition for a period of time). CoD aside, other MS/ABK IP probably could be divested with greater ease … like I could easily imagine someone else taking on e.g. a Tony Hawk without too much friction.

Very hypothetical though. I'm not sure MS would want to entertain this if it became a remedy regulators started guiding on… certainly not re CoD anyway.

Thanks for the thorough response. My thoughts were lining toward that direction - no divestiture just to be open to acquisition right after - but would the receiving company in such a scenario need to have the resources to maintain the IP(s) in their current state or would it be strictly a sale to the highest bidder? Hypothetically, of course.

Idas said:
- One of the lawyers says that he was aware that the CMA "had received a significant number of complaints", although he could not confirm the names of the companies involved.

Is this new information? And were they complaining about the merger or the review process? Very interesting, even being a month old.

BobLoblaw · Feb 3, 2023

Sullivan said:
I guess but if this report is true, and it seems like it comes from a reliable source, it doesn't exactly instill confidence in me that the CMA is approving this.

It doesn't...if we take these handful of opinions as the eventual, factual outcome.

Deleted member 93062 · Feb 3, 2023

Bradbatross said:
They can receive all the complaints in the world, but the CMA is still going to analyze the deal and come to their own conclusion if it's anti-competitive or not. We have no idea who these lawyers are, and it's not like they're saying the deal is 100% getting blocked. They sound just as uncertain as everybody else.

Being as uncertain about the deal as everybody else while supposedly knowing insider deets isn't exactly a good thing.

gofreak · Feb 3, 2023

Kill3r7 said:
The hard part is how much does COD cost? Because they won't be selling them for a pittance.

Yeah, definitely a high barrier to finding a buyer. In this very hypothetical scenario. You'd possibly be into joint venture territory and a more complex set up like that could be off putting for all involved, regulators also. (This is also why you have calls for regulators to be more open or creative about behavioural remedies, at least if they're not just otherwise minded to block)

Trup1aya · Feb 3, 2023

christocolus said:
so the CMA remains the major threat to this deal...but a lot could have happened since December 14th 2022 till date (February 2023)

Idas What would licensing ABK games on FRAND terms entail?

FRAND wouldn't make any sense because it would limit the rates MS would be able to charge for access to there intellectual property… but MS would have to facilitate access to the property…

So they have to go through the hassle of making ports for those who want one, with no means to ensure that is financially beneficial to do so.

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