Yeah I know, Microsoft would most likely close over both AU/NZ just like they would in the US. I don’t expect NZ to be leading the front for regulation considering how small it is, both countries will just piggy back on what the UK does but maybe they’re delaying it because how the UK looks and its a bit iffy.
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Whilst CMA could still hold out, it is increasingly likely that it would be an entirely pyrrhic victory and they must realise this.
- MS are likely to close the deal over their heads anyway, with the “best case” being aggressive/malicious compliance on MS’s part, including removing ABK content from the UK market, closing ABK studios in the UK, or at least removing them from being registered tax in the UK
- Holding out is likely to lead to the UK government restructuring the CMA, neutering it’s powers for dealing with future deals. Even for the parts requiring legislation, that legislation will come.
- Companies will simply choose to invest outside of the UK. It is already happening, with billions of pounds of investment lost after Brexit.
So the CMA are basically done, here. They can either give in gracefully or ensure their own demise as they are currently set up.
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I wouldn’t be surprised if Australia/NZ just doesn’t rule at all honestly. We have a bit of a tenuous relationship with the UK right now, to put it mildly. Even though we are a commonwealth, I wouldn’t be surprised if both nations are looking more towards the FTC court ruling (if it gets there) rather than what the CMA is doing.
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With New Zealand delaying again and a decision from Canada either two days away or them also delaying, there’s not much remaining for Microsoft to wait.
If Microsoft wants to close, there’s really no point in waiting once they have their CAT scheduling hearing on June 12th. There’s no other key dates between June 12th and July 18th.
Otherwise, they should extend the date and/or have Activision publicly waive the date.
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I mean I agree with your analysis that they’ve put themselves in a hole.
But I don’t think its how they see it. Playing CMA devil’s advocate here…
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I think they will then take enforcement action and that would create a long legal fight. The CMA have little to lose in doing that. MS its a big pain for them. CMA - might face political extinction but given an election is coming up that’s unlikely in the short term.
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As per above they’ve just been handed more powers and whilst this may well happen its unlikely to in the short term.
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Maybe but most of that is not to do with their decision on this deal or the CMA generally. It also goes back to ‘political pressure’ on the CMA which is unlikely to materialise significantly in the short term as per above.
The other thing that is pertinent here is that were the CMA to change the decision - and to do so they’d need a new investigation and a new panel to review it - how would they sell that change - having dug in behind their original process - without in effect saying that they bowed to pressure or made a mess of it first time? In either case it means their top brass need to offer up their jobs. So why do that over wait it out and see what happens?
Inspite of the early direction the CAT still is limited in what it can do and the CMA know this. They know they hold the whip hand here. There is a reason they have a high win rate and even when they lose have never reversed a merger decision post Brexit. So they will see it as - see the CAT outcome - which also delays past the deal end point. They probably like the FTC see hope that MS won’t find it as easy to extend that with ABK and therefore time might just cause MS more difficulties.
The other thing the CMA will see is that SHOULD MS close regardless they can play the PR game to say ‘look at big tech ignoring the law again’ and irrespective of what we think here that will raise public support- potentially political support too.
You underestimate the pressure on the cma. MS is far, far more important to the leaders of the UK than the CMA is.
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I believe Microsoft should mentkon their intention to close if they have that intention to CAT on Monday. They can discuss something like closing and holding separate with CAT, who seems receptive of business issues. It may also slightly alleviate pressure from CAT.
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Maybe but they’ve been aware of this for a while. And keep doubling down. If they were worried - they’d keep their mouths shut. I suspect they are more worried about changing their decision and the implications of that than they are about letting the thing play out.
You tell a UK court of law you intend to ignore UK law…I’m not sure that’s a smart idea.
That provides an avenue of discussion. They could discuss with CAT closing and holding separately everywhere outside of the UK as well, so as to easily unweave the transaction if necessary.
I am sure that CAT would rather have it discussed than be ignored in said process and have had that happen between scheduling and their hearing.
The CAT have no jurisdiction over any remedies. They aren’t there to referee that.
They have very broad judicial review and can rule that the CMA was irrational in turning down the behavioral remedies.
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While I see your point here, I will say it would be expensive for the CMA to wage a legal war with Microsoft. I don’t know that their budget is that great considering they only brought in a defense lawyer at the last minute.
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The CMA budget is 110 million GBP per year. Its also been discussed that this may be reduced based on recent developments at the CMA.
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But wouldn’t their original argument need to be used when trying to enforce those fines?
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LOL at any thought that the CMA has any ground to run a successful PR game against Microsoft on this merger if Microsoft decided to close around them. This is such a slam dunk easy case for even “regular” people to understand, and Microsoft has far more money and worldwide clout to have people going “what on earth is the UK doing trying to stop video gamers from being able to play more games on more devices”?
This would not go well at all for the CMA if it ever got to that point, as this is clearly not the merger case to be claiming that big tech is bad to the common person out there based on the clear and relatively simple facts of this one.
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I mean if and i do mean IF the FTC and CMA did collude that in and of itself is illegal and breaks antitrust laws in the US. Legal collusion is not a thing. The FTC is required to follow antitrust laws even though they are tasked with enforcing them as well. So any form of collusion would be at least on the US side not legal. Not sure how it works in the UK.
As two organizations cannot work to illegally take away the rights of another organization’s legally afforded rights.
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Yeah its possibly a choice of words that is poor here. Collusion and ‘cooperation’ are fine lines. Perhaps I should say cooperation.
Has the FTC a reputation for trying to influence foreign regulators to block things they cannot - yep - its alleged. is that illegal? I think there isn’t clarity on that and it will depend on specifics.
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They don’t have to ignore them. They’ll just follow a route of malicious compliance. Pull ABK content out of the UK. Remain compliant with the prohibition. Lose the UK billions. Make MS billions more anyway.
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Thanks.