pardon my ignorance as i am trying to catch up with the thread and that's a bit hard while filtering out bad faith posts and concern trolling, but how much does the European Comissions approval move the needle? it seems like it's good for MS but the CMA is still a massive hurdle for the acquisition. im not really good at parsing all the legal stuff and verbage, i will leave that to you smarter people.
Thanks, appreciate the write-up.The EC approval was the minimum bar needed to clear in order for this deal not to be definitely killed. So it's significant. If they had failed to gain apporoval here they would be facing 3 (or maybe more) jurisdictions and likely would have walked away.
(Either party walking away is still not impossible when it comes time to renegotiate extensions with ABK later in the year of course!)
There is no direct procedural or legal significance to the EC's decision to the biggest remaining obstacle, which is the appeal to the British regulators. That is still a very difficult battle. There might be some indirect help insofar as Microsoft may point to the EC's decision as part of the appeal process. But it is definitely not a slam dunk sort of thing.
This titanic deal was worth $26 billion and further reduced telecommunications options for consumers in an already anti competitive sector.Background:
In May 2022, the Competition Bureau filed court applications with the Competition Tribunal seeking a full block of Rogers' proposed acquisition of Shaw. This action was taken because our position was that the transaction would likely harm millions of Canadian consumers in Alberta and British Columbia, through higher prices, lower quality service, and lost innovation for wireless services - an essential service that Canadians expect to be affordable and high quality.
The hearing of the application began on November 7, 2022 and ran through December 8, 2022. Closing oral arguments took place on December 13 and 14, respectively.
The Tribunal released an Information Note regarding the matter on December 29, 2022, indicating it intended to dismiss the Bureau's application. The Bureau filed a notice of appeal with the Federal Court of Appeal regarding the Tribunal's pending decision on December 30, 2022. The Tribunal's full decision on the matter was issued on January 1, 2023.
On January 24, 2023, the Federal Court of Appeal heard and ultimately dismissed the appeal.
This is a good point and to add onWith the UK stuff, people are following one thread of thought but also not internalizing its meaning.
I don't think it's likely that Microsoft would just up and leave the UK. It would greatly harm Microsoft's reputation to be seen as exiting a country just because a regulator is enforcing the law.
But people happen to believe that, but also that on appeal the CMA will make up whatever it wants to block the deal because they feel like it.
That's the contradiction. Assumptions of damage to Microsoft's reputation come with a built-in idea of some respect the CMA process and that the CMA is actually enforcing laws and not just a rogue entity that does things "just because." So it's odd to see people both believing that Microsoft is unlikely to pull out of the UK (my belief) but also that the CMA can act in any matter possible with consequences.
Microsoft needs to maintain its reputation, but it's not just Microsoft that needs to maintain its reputation.
This can still happen then? Thought it was over, do they still need cma to approve or can they go on without them
This can still happen then? Thought it was over, do they still need cma to approve or can they go on without them
I feel like that's part of the reason for the CMA's tweets mere minutes after the EC's decision was announced: To remind the world that the CMA's block is in place and to blunt any momentum for the deal closing.I can see a push happening for the UK's CAT to work more like other competition tribunals in the commonwealth.
The EC approval was the minimum bar needed to clear in order for this deal not to be definitely killed. So it's significant. If they had failed to gain apporoval here they would be facing 3 (or maybe more) jurisdictions and likely would have walked away.
(Either party walking away is still not impossible when it comes time to renegotiate extensions with ABK later in the year of course!)
There is no direct procedural or legal significance to the EC's decision to the biggest remaining obstacle, which is the appeal to the British regulators. That is still a very difficult battle. There might be some indirect help insofar as Microsoft may point to the EC's decision as part of the appeal process. But it is definitely not a slam dunk sort of thing.
No the CMA strictly forbid Ms from buying any part of ABK currently.
Many countries have a process where a regulatory agency can be overruled by a higher authority after a hearing where the claims made by the agency can be validated. The CMA is unique in they are the highest power and even if errors are found in their decisions ultimately they get the final say. This strikes me as problematic because people are fallible and there should be a process in place that can overrule a bad decision. The FTC in the US has this very system in place. While some may call them 'weak' I call them being held to a clearly defined legal standard and everyone should be held to that.I find it interesting how different the UK is from Canada when it comes to the regulatory appeals process. Unlike the CAT, the CT has the power to make remedial judgements and overrule our Competition Bureau. The CT most recently overruled the CB on the Rogers Shaw deal.
Statement from the Commissioner of Competition on the Federal Court of Appeal’s decision regarding the Rogers-Shaw merger - Canada.ca
Matthew Boswell, Commissioner of Competition, issued the following statement about the Federal Court of Appeal’s ruling to dismiss the Competition Bureau’s appeal in the Rogers-Shaw matter.www.canada.ca
This titanic deal was worth $26 billion and further reduced telecommunications options for consumers in an already anti competitive sector.
The government attached a number of conditions to the approval. You can read about it here: https://globalnews.ca/news/9593953/rogers-shaw-deal-phone-bill-prices/
The Australian Competition Tribunal seems to work in a similar manner to the CT.
I can see a push happening for the UK's CAT to work more like other competition tribunals in the commonwealth.
I agree. IMO the FTC is too weak and the CMA is too strong. Other countries have found healthy middle grounds. I believe that post Brexit UK will eventually find theirs.Many countries have a process where a regulatory agency can be overruled by a higher authority after a hearing where the claims made by the agency can be validated. The CMA is unique in they are the highest power and even if errors are found in their decisions ultimately they get the final say. This strikes me as problematic because people are fallible and there should be a process in place that can overrule a bad decision. The FTC in the US has this very system in place. While some may call them 'weak' I call them being held to a clearly defined legal standard and everyone should be held to that.
Today the Business and Trade Committee has a meeting with the CMA about their work.
Marcus Bokkerink (Chair at Competition and Markets Authority) and Sarah Cardell (Chief Executive at Competition and Markets Authority) will be there.
As far as I can see, it can be watched online.
No doubt that the MS/ABK case will be part of the conversation.
The FTC is as strong as the laws they are madated to protect. I will always prefer to have an agency held to the rule of law than making speculatory or political rulings based on how they feel about a company or merger. If an agency thinks that they did not enforce the laws well enough in the past don't pick a new target in the future to arbitrarily beat up on.I agree. IMO the FTC is too weak and the CMA is too strong. Other countries have found healthy middle grounds. I believe that post Brexit UK will eventually find theirs.
The whole "just ringfence ABK in the UK" isn't a realistic prospect. It's been pushed by some analysts that, frankly, should know better. Microsoft has deep investments in the UK, including infrastructure, research teams, game studios, and much more. Microsoft won't even be considering leaving the UK, nor trying to circumvent a regulator's decision through a carve out. The CMA forced Meta to divest Giphy and Giphy had no physical presence in the UK or any revenue generated in the UK. There's a lot more at stake here for Microsoft in the UK and vice versa for the CMA and UK government.
I mean, they have ruled against it already. They were the firsts basically.
The difference is that the decision is apparently more easily reversible in court than what's possible through the appeal process in the UK.
According to Idas the last major country and regulatory body that hasn't ruled would be China. The rest is smaller. Most should be announced in the coming weeks.
What about the idea of ABK and Microsoft staying appart in the UK and making a special sauce of the Game Pass for the UK ?The whole "just ringfence ABK in the UK" isn't a realistic prospect. It's been pushed by some analysts that, frankly, should know better. Microsoft has deep investments in the UK, including infrastructure, research teams, game studios, and much more. Microsoft won't even be considering leaving the UK, nor trying to circumvent a regulator's decision through a carve out. The CMA forced Meta to divest Giphy and Giphy had no physical presence in the UK or any revenue generated in the UK. There's a lot more at stake here for Microsoft in the UK and vice versa for the CMA and UK government.
The whole "just ringfence ABK in the UK" isn't a realistic prospect. It's been pushed by some analysts that, frankly, should know better. Microsoft has deep investments in the UK, including infrastructure, research teams, game studios, and much more. Microsoft won't even be considering leaving the UK, nor trying to circumvent a regulator's decision through a carve out. The CMA forced Meta to divest Giphy and Giphy had no physical presence in the UK or any revenue generated in the UK. There's a lot more at stake here for Microsoft in the UK and vice versa for the CMA and UK government.
I find it interesting how different the UK is from Canada when it comes to the regulatory appeals process. Unlike the CAT, the CT has the power to make remedial judgements and overrule our Competition Bureau. The CT most recently overruled the CB on the Rogers Shaw deal.
Statement from the Commissioner of Competition on the Federal Court of Appeal’s decision regarding the Rogers-Shaw merger - Canada.ca
Matthew Boswell, Commissioner of Competition, issued the following statement about the Federal Court of Appeal’s ruling to dismiss the Competition Bureau’s appeal in the Rogers-Shaw matter.www.canada.ca
This titanic deal was worth $26 billion and further reduced telecommunications options for consumers in an already anti competitive sector.
The government attached a number of conditions to the approval. You can read about it here: https://globalnews.ca/news/9593953/rogers-shaw-deal-phone-bill-prices/
The Australian Competition Tribunal seems to work in a similar manner to the CT.
I can see a push happening for the UK's CAT to work more like other competition tribunals in the commonwealth.
Not to mention if $MSFT leaves the UK (a hypothetical), they'd create a massive power vacuum left by their products, which would only strengthen its rivals and they can use this built-up in other parts of the world as well. I can absolutely see $GOOG and $MSFT exchanging positions globally. The best Microsoft can do right now is threaten the UK with reduced investment. Shareholders would rather have $MSFT divest Xbox than leave the UK IMHO. xD
i mean that is MS their decisionIt's incredible that only one regulator can block an entire acquisition, after all of the approvals so far too.
On page 980 for sure, not sure about the next.Thank you!
Hopefully this will put the idea of Microsoft leaving the UK to rest.
Who am I kidding? 😆
the regulatory bodies of Xbox's two biggest markets (U.S / U.K) are blocking or seeking to block this deal... yet people keep acting like it's just Burkina Faso that's in the way or something.It's incredible that only one regulator can block an entire acquisition, after all of the approvals so far too.
This is an oversimplification of the situation. The the EU had opposed the deal or given agency to the CMA's opinion that cloud gaming is a separate market, the deal would definitely be dead. Instead the EU approved the deal with conclusions that conflict with the CMA's report. This in theory will help with MSFT's appeal to CAT.The EC approval was the minimum bar needed to clear in order for this deal not to be definitely killed. So it's significant. If they had failed to gain apporoval here they would be facing 3 (or maybe more) jurisdictions and likely would have walked away.
(Either party walking away is still not impossible when it comes time to renegotiate extensions with ABK later in the year of course!)
There is no direct procedural or legal significance to the EC's decision to the biggest remaining obstacle, which is the appeal to the British regulators. That is still a very difficult battle. There might be some indirect help insofar as Microsoft may point to the EC's decision as part of the appeal process. But it is definitely not a slam dunk sort of thing.
I think a lot of people are operating under the assumption that it will be difficult for the FTC to successfully block the deal in the US, which probably isn't inaccurate. The FTC can try to take a stand against Big Tech and try to make an example out of Microsoft or whatever, but that's different from the transaction actually being illegal under US law.the regulatory bodies of Xbox's two biggest markets (U.S / U.K) are blocking or seeking to block this deal... yet people keep acting like it's just Burkina Faso that's in the way or something.
Remedy:
- A corresponding free license to cloud game streaming service providers to allow EEA-based gamers to stream any Activision Blizzard's PC and console games.
It's not just the UK the FTC already said they are going to try and block it here in the US it's just that their process regarding this issue conveniently doesn't start baring any meaningful results until Microsoft either gives up on the Acquisition in July or is forced to renegotiate the deal with ABK.It's incredible that only one regulator can block an entire acquisition, after all of the approvals so far too.
It's seems like the CMA is more concerned with the future of the cloud industry rather than the here and now. Because what happens after those 10 years? Isn't Microsoft basically admitting that they will be taking back those licenses and they get their "cloud gaming monopoly" anyways? Because 10 years is not a long time in terms of scope that's basically the start of the PS7 Generation or end of the PS6 Generation.This is an oversimplification of the situation. The the EU had opposed the deal or given agency to the CMA's opinion that cloud gaming is a separate market, the deal would definitely be dead. Instead the EU approved the deal with conclusions that conflict with the CMA's report. This in theory will help with MSFT's appeal to CAT.
1. The EU did not view cloud gaming as a separate market.
2. The EU believes the 10 year deals are pro competition, whereas the CMA does not. The CMA also believes these agreements although similar to console licensing agreements, could be ineffective although they didn't describe why.
3. The EU understood that the development of cloud gaming would take time to mature, the CMA believes it will be a $6-$11B per year industry by the end of next year.
4. The EU found no evidence to suggest ABK titles would make their way onto game subscription services in the near future. The CMA disagrees with the EU and every third party and says ABK will change their position and start offering their games on subscription services soon.
These disagreements will help MSFT make their appeal case to the CMA. Remember the CMA's objections are all based on rampant speculation and based on their immediate response to the EU ruling, they're upset that other regulators aren't predicting the same doomsday outcome that they are.
The whole "just ringfence ABK in the UK" isn't a realistic prospect. It's been pushed by some analysts that, frankly, should know better. Microsoft has deep investments in the UK, including infrastructure, research teams, game studios, and much more. Microsoft won't even be considering leaving the UK, nor trying to circumvent a regulator's decision through a carve out. The CMA forced Meta to divest Giphy and Giphy had no physical presence in the UK or any revenue generated in the UK. There's a lot more at stake here for Microsoft in the UK and vice versa for the CMA and UK government.
Listening to some discussions about this news and people are still unsure about what it means for cloud services like Netflix, Luna and others.
They think they can just put the games on their streaming library for free.
And, you know, that's what I understand here.
There is another paragraph that's about the consumers, and it does mention "the games for which they own the licence", but I don't know if the two points go together or if they're separate cases.
All regulators are forward looking or at least they should be when considering whether or. It a merger/acquisition is harmful to consumers or competition. The main difference between the CMA and every other regulatory body in the world is that the CMA is willing to say that they can confidently predict the future 10+ years from now. We can already see from their own report though that their projected annual revenue of cloud gaming that they are way off. They argued in their final report that cloud gaming revenue in the year 2025 alone would be 3x-6x what the industry has generated in the past 10 years combined. Also the argument that ABK titles would soon arrive on gaming subscription services with the ABK and every third party vehemently refute that claim is insane. These are bad faith arguments, and honestly they're indefensible. That's probably why the CMA immediately responded to the EC's ruling. If they were confident in their decision they wouldn't mind it being scrutinized, but they're clearly feeling insecure.It's not just the UK the FTC already said they are going to try and block it here in the US it's just that their process regarding this issue conveniently doesn't start baring any meaningful results until Microsoft either gives up on the Acquisition in July or is forced to renegotiate the deal with ABK.
It's seems like the CMA is more concerned with the future of the cloud industry rather than the here and now. Because what happens after those 10 years? Isn't Microsoft basically admitting that they will be taking back those licenses and they get their "cloud gaming monopoly" anyways? Because 10 years is not a long time in terms of scope that's basically the start of the PS7 Generation or end of the PS6 Generation.
I'm skeptical about whether or not this is true. The CMA explicitly stated in their report that they were using monthly active users of XCloud to determine market share. If those numbers are anything other than that this is a smoking gun.What? Did they really? Because going by this logic amazon has 200M cloud gaming users lol
Today the Business and Trade Committee has a meeting with the CMA about their work.
Marcus Bokkerink (Chair at Competition and Markets Authority) and Sarah Cardell (Chief Executive at Competition and Markets Authority) will be there.
As far as I can see, it can be watched online.
No doubt that the MS/ABK case will be part of the conversation.
EU didn't have the "exact same concerns". It didn't treat cloud as a separate market, for a start.Is it just me or is the EU ruling actually going to make it very hard for MS to challenge the CMA?
My understanding is that to challenge it they have to show the CMA were being irrational. However the EU ruling has the exact same concerns as the CMA, they just seem happy with the 10 year deal.
So now MS can only really argue that it's irrational to think a 10 year deal isn't sufficient. And when they can just do whatever they want and pull the games after 10 years, that isn't really irrational at all.
Basically EU are looking at the next 10 years, CMA looking at the indefinite future.
The EU agreeing with all the CMAs concerns on principle is actually probably a bad thing for MS's ability to challenge the CMA.
What? Did they really? Because going by this logic amazon has 200M cloud gaming users lol
EU sees the cloud market as complementary not a separate market which is a pretty big distinction from the UKIs it just me or is the EU ruling actually going to make it very hard for MS to challenge the CMA?
My understanding is that to challenge it they have to show the CMA were being irrational. However the EU ruling has the exact same concerns as the CMA, they just seem happy with the 10 year deal.
So now MS can only really argue that it's irrational to think a 10 year deal isn't sufficient. And when they can just do whatever they want and pull the games after 10 years, that isn't really irrational at all.
Basically EU are looking at the next 10 years, CMA looking at the indefinite future.
The EU agreeing with all the CMAs concerns on principle is actually probably a bad thing for MS's ability to challenge the CMA.