Tag: cma

Microsoft-Activision Blizzard Deal Approval Again in Hands of UK’s CMA

Microsoft’s Activision Blizzard deal is back in the hands of Britain’s antitrust regulator after an appeals court granted an adjournment, and the grounds for why the UK should reconsider its block on the US software giant’s takeover were published.

The Competition and Markets Authority (CMA) set out on Friday Microsoft’s arguments for the reconsideration, as the US battles to win UK approval to buy Call of Duty maker Activision.

Having initially blocked the $69 billion (roughly Rs. 5,65,480 crore) deal in April over concerns about its impact on competition in the cloud gaming market, the CMA has since reopened the file, after it was left increasingly isolated amongst world regulators in its opposition.

The CMA said it is likely to be able to reach a new provisional view on the restructured deal in the week beginning August 7.

Explaining why the deal should now be given the green light, Microsoft argued that the binding commitments accepted by the European Union shortly after Britain had blocked the deal changed matters, court documents published showed.

The software company gave legally-binding commitments to European authorities that Activision games can be streamed for a decade after the merger, and has entered into agreements with Nvidia, Boosteroid and Ubitus.

As part of that a monitoring and enforcement regime will be established, which Microsoft said should ease some of the CMA’s concerns.

Microsoft also argued that the terms of the CMA’s proposed block reached further than necessary to tackle its cloud gaming concerns, for example in covering Activision Blizzard’s King unit, which makes mobile device games like Candy Crush Saga.

The CMA said it understood that Microsoft considered the recent licensing deal it agreed with Sony constituted a further material change of circumstance or special reason.

For its part, the CMA dismissed as “irrelevant and immaterial” to its decision to look again at the deal the failure by US authorities to get it blocked in the courts there.

Britain’s Competition Appeal Tribunal provisionally approved the adjournment on Monday subject to further submissions from the parties. It formally granted it on Friday.

© Thomson Reuters 2023  

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Activision Blizzard, Microsoft Extend $69 Billion Deal Deadline to October 18

Activision Blizzard said on Wednesday it has extended the deadline for the close of its $69 billion (roughly Rs. 5,66,200 crore) takeover by Microsoft to October 18 as the companies work to secure approval from the United Kingdom’s antitrust authority.

The “Call of Duty” publisher said the companies also agreed to increase the deal termination fee to $3.5 billion (roughly Rs. 28,700 crore) from $3 billion (roughly Rs. 24,600 crore) if it does not close by August 29. The fee will further rise to $4.5 billion (roughly Rs. 36,900 crore) after September 15.

The two U.S. companies originally agreed to close the deal by July 18, but U.S. regulatory efforts to block the takeover and Britain’s push to restructure it have delayed the close.

The U.S. Federal Trade Commission’s (FTC) bid to temporarily stop the deal was denied twice, first by a federal judge and then by an appeals court.

Britain’s Competition and Markets Authority (CMA) had earlier decided to block the deal, but reversed course last week and extended its deadline for a final ruling to August 29 after the U.S. court ruling left Britain alone in opposition.

Regulators in both countries have varying concerns over the deal.

The FTC said the deal could let Microsoft degrade Activision’s game quality or player experience on rival consoles like Nintendo and Sony Group’s PlayStation, as well as manipulate pricing or change terms or timing of access to Activision content.

The CMA questioned whether the deal could hinder competition in the cloud gaming industry, where users can play on any device using subscriptions such as the Xbox Game Pass that offer a wide selection of games.

Microsoft responded to these concerns by offering 10-year licensing deals to rivals after the deal closes. The latest was an agreement with Sony Group to keep “Call of Duty” on PlayStation, the biggest competitor to Microsoft’s Xbox.

© Thomson Reuters 2023

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Microsoft’s Appeal Against UK Block on Activision Deal Paused for Two Months by London Tribunal

Microsoft’s appeal against Britain’s block on its $69 billion (nearly Rs. 5,66,100 crore) takeover of Activision Blizzard was formally paused by a London tribunal on Monday, to give the parties more time to resolve the dispute.

Microsoft, Activision, and Britain’s competition regulator, the Competition and Markets Authority (CMA), had all asked for a two-month stay of the case after the CMA said it would consider a modified deal put forward by Microsoft.

The Competition Appeal Tribunal (CAT) ruled on Monday that the full hearing of Microsoft’s appeal, which was due to begin on July 28, should be adjourned.

Judge Marcus Smith said he was willing to adjourn next week’s hearing if the CMA provided set out why it considers there has been a material change in circumstances or special reason justifying its adjournment application.

The judge also asked for the CMA to set out any new consultation process “so that everybody is clear as to how it will work”.

The CMA in April became the first major regulator to block the acquisition of the “Call of Duty” maker, citing concerns about the impact on competition in cloud gaming.

The US Federal Trade Commission (FTC) has also opposed the tie-up but suffered a major defeat last week when a federal court rejected the FTC’s application to temporarily halt the deal.

In Britain, the CMA’s final report is usually the last word. Companies cannot offer remedies after its publication and their only recourse is to the CAT.

But last week, less than an hour after a US federal court ruled the deal could go ahead, the CMA said it could look again at a modified proposal. It later said a restructured deal could satisfy its concerns subject to a new investigation.

All sides applied for a two-month pause of the case at the CAT, which the CMA’s lawyers said in court filings will “allow the CMA and the parties to engage swiftly and constructively in relation to Microsoft’s proposals”.

David Bailey, a lawyer representing the CMA, told the tribunal that the FTC’s initial defeat “formed no part of the CMA’s thinking” when it decided it would look at a new deal.

He added: “Based upon the discussion to date, both sides – Microsoft and the CMA – have confidence that Microsoft notifying a restructured transaction is capable of addressing the concerns that the CMA has identified.”

Microsoft’s lawyer Daniel Beard said: “The UK is the only impediment to closing (the deal) and speed is of the essence.” 

© Thomson Reuters 2023 

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Microsoft Asks London Court for Two-Month Pause of Appeal Over Activision Deal

Microsoft on Monday asked a London tribunal to pause its appeal against Britain’s block on its $69 billion (nearly Rs. 5,66,100 crore) takeover of Activision Blizzard to give the parties more time to resolve the dispute.

Britain’s competition regulator, the Competition and Markets Authority (CMA), in April became the first major regulator to block the acquisition of the Call of Duty maker, citing concerns about the impact on competition in cloud gaming.

The US Federal Trade Commission (FTC) has also opposed the tie-up, but suffered a major defeat last week when a federal court rejected the FTC’s application to temporarily halt the deal.

In Britain, the CMA’s final report is usually the last word. Companies cannot offer remedies after its publication and their only recourse is to the Competition Appeal Tribunal (CAT).

But last week, less than an hour after a US federal court ruled the deal could go ahead, the CMA said it could look again at a modified proposal. It later said a restructured deal could satisfy its concerns subject to a new investigation.

All sides applied for a two-month pause of the case at the CAT, which the CMA’s lawyers said in court filings will “allow the CMA and the parties to engage swiftly and constructively in relation to Microsoft’s proposals”.

Microsoft’s lawyers said in court filings that the CMA is “the critical impediment” to closing the deal and pausing the case would allow all sides to try and find a solution.

However, Judge Marcus Smith said he wanted to hear the lawyers on whether there was a “proper legal foundation” for the CMA to consider a modified deal.

The judge also asked whether the FTC’s initial defeat in the US had been taken into consideration by the CMA.

© Thomson Reuters 2023

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Amazon Gets UK CMA Clearance for $1.7 Billion Roomba-Maker iRobot Acquisition

Britain’s competition regulator on Friday cleared Amazon’s planned $1.7 billion (roughly Rs. 13,900 crore) acquisition of iRobot, maker of the Roomba vacuum cleaner.

The Competition and Markets Authority (CMA) said it had concluded that the deal would not lead to competition concerns in the UK.

“We’re pleased with the UK Competition and Markets Authority’s decision and are committed to supporting regulatory bodies in their work,” a spokesperson for Amazon said.

“We look forward to similar decisions from other regulators soon.”

Meanwhile, iRobot did not immediately respond to a Reuters request for comment.

In April, the CMA had launched a “Phase 1” probe into the deal which was announced in August last year as Amazon sought to expand its stable of smart-home devices, which include the Alexa voice assistant, smart thermostats, security devices, wall mounted smart displays and a canine-like robot called Astro.

Regulators on both sides of the Atlantic are wary of Big Tech acquiring smaller rivals, especially those with access to big volumes of user data, and tend to demand remedies in return for approving such deals.

EU antitrust regulators will decide by July 6 whether to clear the deal, while the US Federal Trade Commission is also examining the acquisition.

© Thomson Reuters 2023

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Microsoft Hits Back at UK Regulator’s Decision to Block Activision Acquisition

Microsoft’s president Brad Smith said the UK regulator’s decision to prevent its acquisition of Call of Duty maker Activision Blizzard “had shaken confidence” in Britain as a destination for tech businesses.

The Competition and Markets Authority (CMA), which operates independently from government, blocked the deal on Wednesday, saying it could hit competition in the nascent cloud gaming market.

Microsoft hit back on Thursday, saying it was “probably the darkest day in our four decades in Britain” and sent the wrong message to the global tech industry about the UK.

“If the government of the United Kingdom wants to bring in investment, if it wants to create jobs (…) it needs to look hard at the role of the CMA, the regulatory structure in the United Kingdom, this transaction, and the message that the United Kingdom has just said to the world,” he told BBC radio.

A spokesman for British Prime Minister Rishi Sunak said Smith’s comments were “not borne out by the facts.”

“We continue to believe that the UK has an extremely attractive tech sector and a growing games market,” he said. “We will continue to engage proactively with Microsoft and other companies.”

Smith said Microsoft had worked effectively with regulators in Brussels but not in London, which he said refuted Britain’s claim that it would be more flexible after Brexit.

The company had answered the CMA’s questions, he said, and it had told them to come back with any more concerns. “They went silent, we heard nothing from them,” he said.

“There’s a clear message here — the European Union is a more attractive place to start a business if you want some day to sell it than the United Kingdom,” he added.

But CMA Chief Executive Sarah Cardell said the regulator’s role was to make sure Britain was a competitive environment for businesses to be able to grow and thrive.

“The decision that the CMA takes is an independent decision that we reached looking at an overall assessment of the impact of the deal on competition, and we think that is the right decision for the UK,” she said.

She noted the US Federal Trade Commission was also pressing for the deal to be blocked on competition grounds.

Microsoft said yesterday it would appeal, with “aggressive” support from Activision.

Appeals against CMA rulings are heard by the Competition Appeals Tribunal, which makes a judgment on the merits of the decision. It will not be an opportunity for Microsoft to submit new remedies.

© Thomson Reuters 2023

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