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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.
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 can still happen then? Thought it was over, do they still need cma to approve or can they go on without them
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.
www.canada.ca
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.
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.
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.
This is a good point and to add on
Business investment and trade strategies are highly political and tied into the landscape of how "safe" a region is for your business to be in
The CMA blocking a worldwide deal for its economic sovereignty is its right to do for it if it believes it can but this then informs the business community of the increased risk of further integration with the UK / Uk operations
Microsoft may have to take this loss on the chin at the end of the day but they won't be just taking it laying down. Moving what they can to friendly territories like the EU/ Ireland or simply delaying investments once earmarked for the UK and sending that capital elsewhere is a consequence that the government and regulators should consider
Investment and trade is just as much politics as an election cycle and anyone who says that a block won't have potential repercussions for the CMA / uk gov is not talking in good faith, just as people who say Microsoft would ringfence the UK and leave all together isn't really talking in good faith
Deal was never "dead" . It is going to face more scrutiny and tougher challenges but there's still a path forward. They can't go on without the CMA but there are levers for them to utilise. They just take lots of time which could be used on other deals etc so it's a "is the juice worth the squeeze" question more than a is the deal dead question
They need to successfully appeal against the CMA's decision, which while not impossible is incredibly unlikely.
It's incredible that only one regulator can block an entire acquisition, after all of the approvals so far too.
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.
It is entirely possible that the CMA will be the last one standing in the way of the deal. And the conversation could turn from 'Thank you for protecting our interests as consumers' to 'Why are you making us appear anti-business?'
I think that some calls from DC to London will occur.
100% right that MS faces an uphill battle, looking at the existing framework for procedural appeals concerning the CMA decision.
No the CMA strictly forbid Ms from buying any part of ABK currently.
OP
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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.
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.
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.
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.
Any opinions on how the discussion might go? What's your take Idas?
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 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.
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. 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.
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Thank you!
Hopefully this will put the idea of Microsoft leaving the UK to rest.
Who am I kidding? 😆
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 ?
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
Important to note that they said they intend/seek to block.
FTC Seeks to Block Microsoft Corp.’s Acquisition of Activision Blizzard, Inc.
The Federal Trade Commission is seeking to block technology giant Microsoft Corp. from acquiring leading video game developer Activision Blizzard, Inc.
The difference being that if they had actually blocked/requested an injunction to prevent the merger from closing they would have had to present their case to a judge. And the FTC knows it's going to lose, so they just signaled they were going to and sent the case in their internal administrative process.
If they do this they can keep the process without a conclusion for as long as they want. That is the reason MS/ABK said they would close the deal if they got approvals from all the other main regulators except the FTC.
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.
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.
For Canada, the main difference is that our CT usually overturns all attempts to block anything form the Competition Bureau. It's basically a song and dance that ends in a guaranteed approval since legally companies are allowed to use the efficiency/synergy argument in appeals. That being that a deal that leads to greater corporate effeciencies can trump consumer theories harm.
So in the end nothing actually ever gets blocked better. Which is why I'm surprised it's taking so long for them to get that Rubber Stamp in Canada. But then again they could just be delaying things to not tick off the FTC and keep relations going with the US.
It's bullshit, but it is what it is. The CB wants more power, though the politicians prefer the status quo. So nothing will change in the near future.
Long terms yes. But for Microsoft to truly pull out, in the short to medium term of 0-15+ years, it'd be an apocalyptic scenario for the UK that would tank their economy to the tune of hundreds of billions of pounds while literally every single company, government and individual has to light on fire the existing technology stacks and replace them with new tools and software, and retrain their entire population from the ground up.
All the while you have people in high tech jumping ship to other countries so that their skills aren't obsoleted overnight from the ban/pulling out.
You'd also be kidding yourself if you think the UK would just move to another American Company after that too. They would throw out all stops to replace them with a local tech firm so that they can control them. Which will of course cost 10x as much and take that much longer because they'll need to build one up from scratch.
So yeah, it's just not happening.
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i mean that is MS their decision
For them UK is one of the key make or break markets.
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.
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.
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.
Wow, didnt expect the EU to approve of the merger!
Happy to see that.
Its interesting how both the EU commission and the CMA diverge in their conclusions, one willing to regulate the deal among a set timeframe while the other is outright blocking it. Do hope that CAT takes that into account when viewing the eventual appeal. Kinda mad that all cloud gaming distribitors who are also competitors of MS wanting this deal to happen but the deal maybe being killed, which looking at the current state of cloud gaming, could also seriously stiffle any future cloud gaming market.
Happy to see that.
Its interesting how both the EU commission and the CMA diverge in their conclusions, one willing to regulate the deal among a set timeframe while the other is outright blocking it. Do hope that CAT takes that into account when viewing the eventual appeal. Kinda mad that all cloud gaming distribitors who are also competitors of MS wanting this deal to happen but the deal maybe being killed, which looking at the current state of cloud gaming, could also seriously stiffle any future cloud gaming market.
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.
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.
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.
Not to mention that the NHS, the worlds 5th largest employer at 1.7 million staff and a critical piece of UK infrastructure, is hugely reliant on Microsoft to operate.
As you say, MS is deeply embedded across the entire UK economy, both public and private. Full withdrawal from UK is a total non-starter.
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It's almost certainly true and I reckon will be used by Activision and Microsoft's respective lawyers as a way to question the legality of the CMA ruling at the CAT.
Free can mean so many things. Free could just mean open for any cloud services to pay a nominal fee and get the games on their service. But it could also mean free to these companies to put it on their services and for the user who owns the game on PC or console to stream it for no additional cost to their initial purchase. I'm sure the full release will clarify.
What? Did they really? Because going by this logic amazon has 200M cloud gaming users lol
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.
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.
This meeting will start at 10:30 BST, which is an hour and twenty minutes from the time of this post.
The letter sent in advance of this meeting from Sarah Cardell to the head of the Business and Trade Committee, Darren Jones, mostly talked up the introduction of the Digital Markets, Competition and Consumers Bill, and I'd expect the committee meeting to mostly talk about that and what it will mean in future in broad terms. But they did also mention the MS/ABK deal, so it's likely that gets brought up.
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.
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.
EU didn't have the "exact same concerns". It didn't treat cloud as a separate market, for a start.
exactly my thought, not the first math mistake from the CMA tho
EU sees the cloud market as complementary not a separate market which is a pretty big distinction from the UK
EU also made stronger remedies to support their views by forcing Microsoft to make sure a valid owned licence can be streamed on any cloud platform in the EU which goes above and beyond the deals MS has made
and to top it all off the uk CMA came out and said they didn't believe in any of the eu findings are helpful for them and are happier to go alone in their thinking so the EU findings cant be a schroedingers findings where they hurt Microsoft with the CMA but are also irrelevant to the CMA
Best to just wait and see what happens imo. The only constant in this has been that traditional conventions do not apply and there is an element of politics that has infiltrated this business process