My feeling is that the MS plan will be to close this if they defeat the PI and then hold ABK as a subsidiary that in theory can be divested should ultimately they lose in the UK. I also suspect strongly that they feel there is a way round the CMA as obviously completing the deal and then ultimately being forced to divest is financially a terrible outcome for them.
The thing is that closing it gives them a longer legal road to pursue whatever they think they have up their sleeves in the UK - perhaps some sort of ringfence or whatever - the reality is that any long winded appeals will require a longer extension and Iām just increasingly of the view neither they nor ABK want that.
Wasnāt today (19th June) supposed to be a CMA document day or something. I know weāve had the full report (blocking announcement) but Iām sure I read that the 19th of June was a date of note?
āAfter carefully examining feedback from majority of the cloud market participants, including nVidia, Boosteroid, EE, we have reevaluated our stance on the impact of the acquisition of ABK by MS on the cloud market. We now accept the proposed remediesā and so on.
Makes sense. They wonāt want to wait for the CAT hearing as that could give the FTC the leeway to appeal. Iām not sure but some have suggested Microsoft could waive the UK according to the merger agreement. I do also think comity will have a stronger bearing once the FTC loses. I do think like the Microsoft lawyer said in the last case hearing, this is an American contract and needs to be judged based on that. I do also think once FTC loses the UK global order might become ineffective based on comity and that the main regulator would have approved.
I donāt think there is any way they will comply to divesting if they lose the CAT hearing. I think whatās most important is the US approval which they can win in court if they defeat the FTC. They are not going to after that just for the UK divest at the most, they will ringfence ABK in the UK or something.
That seems a bit risky. The list of companies who could (or even allowed to) acquire ABK would be very small and loss they would take on the $69b would be very high.
Microsoft did argue during the second phase of the CMA review that the CMA didnāt have the right to overwrite the decisions of other nations and I think Mlex had a report they had hired more lawyers to tackle the CMA global order. One thing too is I do wonder if the FTC is defeated that global order might become ineffective due to comity and that this is an American contract.
Yeah thatās the risk but like I say they must feel they have a route round it even if not the CAT success they hope for.
Maybe Iām wrong and of course the intention to extend wonāt be clear until the very point at which they do it but Iām just not seeing a lot of passion for that approach. Also reading ABK investors and stockmarket players saying that an extension is hard for ABK to stomach based on the success rate of CAT appeals and then the potential length for anything beyond that - is making me think that MS might have decided its July or never.
I donāt know what renegotiating would cost them but its not a simple āwhich is moreā calculation because closing IF they think they can manage the UK scenario is managed risk whereas extending it is less managed risk because they arenāt in control of the timescales or the processes.
Comity is more that the CMA canāt ignore the global interests and impacts of the deal or the decision. The CMA order only applies to a trading UK entity. The fact MS want to remain one makes it a āglobal orderā but I donāt think anyone seriously expects that to be unpicked.
The comity argument is for the CAT - have the CMA considered other jurisdictions and their views on the deal sufficiently - and IF FTC lose in advance that argument that in effect the CMA are the outliers becomes very strong. It probably though isnāt going to be the thing that can change the CMA decision - even if the CAT ask them to consider it that alone wonāt change it (unless the CMA want it to!).
I dont think that the CMA will get to make a new decision. Based on what CAT wrote in response to the Meta-Giphy filing, CAT already informed the CMA that they dont have to give anything back to the CMA. CAT also indicated that they intend to fully and quickly provide clarity and resolution to the acquisition. That means that things will have no wiggle room. Their decision will come and even if the CMA gets it back, they wont be able to change it.
My guess would be that CAT will tell the CMA that they canāt make a ruling that impacts the decisions of regulators in other jurisdictions that have already ruled on the matter.
Could they even come up with one? However, a CAT decision will be after the deadline. Microsoft must have something else that they are betting on should they defeat the FTC.
Cmon NZ donāt be like thatā¦ they just released a statement of issue
If Activisionās game titles are sufficiently important to driving sales of cloud gaming
services or video game consoles, then this could result in the merged entity having
both incentive and ability to foreclose rivalsā access to this content, weakening their
ability to compete.
We are considering whether the merged entity would have the ability and incentive
to foreclose its rivals, or potential rivals:
9.1 in cloud gaming, by refusing to license Activision content to them in New
Zealand; or
9.2 in video game consoles, by making all or certain Activision content available
exclusively on Xbox (and/or Game Pass) or degrading the quality of Activision
content on rival console platforms.
To be fair, these comments are based on the scenario where thereās no remedy, they mentioned in the doco that they are aware of the remedies agree to EU and will test the scenario with the remedis in consideration in the coming days.
Yeah Microsoft probably have barely spoken to them, Iām sure itāll be passed with the same EU stuff but itās a bit silly seeing these same things brought up about Sony when every other regulator dropped them.
Oh and also it would be funny if we (Australia) try to block it on the premise of harming Playstation when PS4 outsold Xbox One every single month since the launch of last gen and Iād be shocked if that still wasnāt the case.