Microsoft numba wan. CMA numba eight!
CMA will be one of the number 38 through 43 actually.
CMA number 1992.
After UK fractures into 1700 different nation states.
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Closing or not closing the deal has nothing to do whether MS has UK studios or not. If the deal is closed and CMA blocks, then MS and ABK, which will be the same, has to stop existing or selling in the UK.
MS and ABK deal wonât close in the UK tho. Itâll close in countries outside of UK but not in UK because ABK wonât exist in UK. Only the new independent ABK UK will exist.
Here is what ChatGpt4 said.
In your hypothetical scenario, Activision Blizzard separates its UK operations into an independent entity and merges its remaining global operations with Microsoft, after the merger receives approval in jurisdictions outside of the UK.
In such a situation, the Competition and Markets Authorityâs (CMA) jurisdiction and actions would largely be confined to the UK. The CMA has the power to review and potentially block or impose conditions on transactions that affect the UK market, but it generally does not have jurisdiction over transactions that occur entirely outside of the UK.
However, the CMA could still potentially take action in a few ways:
- Review of the Spin-Off: The CMA could potentially review the spin-off of Activision Blizzardâs UK operations to ensure that it does not in itself result in a substantial lessening of competition within any market or markets in the UK.
- Future Transactions: The CMA could potentially scrutinize future transactions involving Microsoft or the independent UK entity resulting from Activision Blizzardâs spin-off. The CMAâs past experiences with these companies could influence its approach to these future transactions.
- Cooperation with Other Regulators: While the CMA may not have jurisdiction over the Microsoft-Activision Blizzard merger outside of the UK, it can potentially share its concerns with competition regulators in other jurisdictions, who may choose to reevaluate their own decisions or take a closer look at future transactions involving these companies.
- Observation of Market Effects: Even after the separation and the global merger, the CMA could continue to monitor the UK market for potential anti-competitive effects that might indirectly result from the transaction. If such effects are identified, it could potentially take action to address them, within the limits of its jurisdiction and powers.
I asked further about why would UK ABK cause SLC when the previous ABK didnât.
Youâre correct in pointing out that if the Competition and Markets Authority (CMA) did not find a substantial lessening of competition (SLC) with the original company, then it would be unlikely to find an SLC with a spin-off company.
My previous statement was more a general comment about the CMAâs potential involvement and the need for due diligence in such a complex process. The creation of a spin-off company would constitute a restructuring of the business landscape, and the CMA might be interested in examining that restructuring to ensure that it doesnât raise new competition concerns. This would be particularly true if the spin-off company were to merge with or be acquired by another entity in the future.
In your specific scenario of Activision Blizzard spinning off its UK operations into an independent entity, if the CMA had no issues with Activision Blizzardâs presence in the UK market prior to the proposed merger with Microsoft, it is indeed unlikely that the spin-off company itself would create a new SLC issue.
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Microsoft can close over them regardless. They just open themselves to fines.
UK cant ACTUALLY prevent anything.
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Of course, you can close with fines.
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CMA will go to court to leverage those fines and the court says they donât apply since MS and ABK didnât close in the UK because they abandon the merger in the UK.
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You can not close the deal like that. ABK UK as you name it would be a client of MS, so the SLC would prevail.
Independent company can do what they want.
As long as MS + ABK doesnât profit from ABK games in the UK, the CMA canât do anything legally about it. As it fails the turnover test.
What studios do ABK have in the UK ?
I believe that Sledgehammer opened an office and that King is headquartered here.
Thatâs wrong on two counts. The turnover test isnât relevant hereâŚbecause a decision has been made with prohibition. MS can not acquire ABK - irrespective of where that transaction occurs. Or the CMA have the power to take action.
Also the turnover test is also a market share one and MS would trigger that regardless.
Ultimately, UK consumers bear the brunt of the CMAâs actions. In order to comply with the CMAâs demands, Microsoft may simply create a modified version of its cloud gaming service. If this occurs, gamers residing in the UK will have an inferior, more limited service compared to consumers elsewhere.
For something that a few forum lawyers told us was impossible, it seems more and more financial analysts believe that this is possible, including City AM a London-based business publication.
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Lots of American analysts are saying this. Even Fosspatents has said he doesnât believe this is an option.
American analysts who all do not understand the way regulation works in the U.K.
It just remains that the CMA will not be the lone organization to block things (and succeed). Iâm not a legal expert, as Iâm sure most others here are not.
However, Microsoft has the legal council of the most prolific lawyers in both the UK and the rest of the world. They will have a path forward.
Right now, I think its fairly obvious that the play first is to let the pressure ramp up to levels that make the CMA literally uncomfortable and worried about their jobs and the CMAs future independence. A pressure campaign while other regulators approve until at least June 18th makes a ton of sense.
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Satya coyly implied it himself, but according to forum armchair analysts heâs just bluffing and full of shit.
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This wasnât an American analyst. City AM is London, UK based.
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Of course the CMA can take action. I just donât see what kind of action can they take that will hold up in court. CMA will sue to stop MS and ABK from merging in the UK? Thatâs already not happening.
The market share test would fail because MS and ABK will not be merging in the UK. MS+ABK will not conduct business in the UK as a single entity.
Yeah thatâs what I was thinking. If the CMA has problems with cloud then couldnât Microsoft change the deal with Activision to modify their cloud service for UK users whilst remaining the same for the rest of the world?
That being said I think Microsoft are definitely going to close this deal now especially with EU and China approving.
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