I doubt an indepedent ABK would approve such a thing, besides it wouldn’t ‘fuck CMA in the ass’. They would be happy with that because it means they got their way and MS wouldn’t own ABK.
As for lobbying the UK to dissolve the CMA, that’s a dangerous path for a corporation to go down, and trying to get the UK to rejoin the EU is laughable. Even though alot of people here want that to happen, it just won’t, at least not for 15+ years etc. Far too political.
CAT can’t overrule CMA, all they can do is pass it back to CMA to look again.
In the immediate future - but they aren’t really worried about that. They are worried about 20 years on, 30 years on. What happens if MS have the IP and under new ownership say ‘nah we’re not licensing it on reasonable terms we’re using it to squeeze EE etc out of the market’.
That’s the crux of their argument. The basic premise is ‘its too dangerous to let an already major player in a developing market have more IP’. I’m not saying they are right but people keep misinterpreting their view.
The deals MS offered clearly do solve it in the short term. But the CMA are asking - how can we prevent them from reneging in 5 years time OR from pulling everything in 10 years…and without significant oversight that becomes very hard - its going to be hard to do that.
The question is whether that is necessary. I don’t think it is for a nascent market that may well never materialise. But then I’m not measured on my performance by what happens in the market.
If you say it this way - they block it and worst that happens is MS through their server and content advantage monopolise it. The CMA aren’t measured on that. So its not them. But if they passed the deal and 10 years late a new MS CEO makes aggressive moves and squeezes out the UK players - CMA are on the hook for it.
Its not that they are ‘right’ its that you have to understand their remit, framework and position. Its pointless arguing from an arbitrary position where there is just your own logic frame to work with.
The point I’m making here is simple. The CMA haven’t concluded anything different to the EU. They just have different views on remedies. This was known since forever. And when it was brought up everyone here said ‘nah man they will bend, change’. They didn’t.
If we deal in knowns - then we knew the CMA position all along. Whether we agreed or didn’t (and I don’t) their cloud SLC is in line with the EU and their remedy position is consistent with how they’ve always treated deals.
Yes they are definitely looking at this longer than 10 years, I feel if Sony had an equal cloud service this wouldn’t of been rejected though. Basically if we pretend that game consoles don’t exist (which is partly what CMA have done), then we are in a scenario where Xbox, Bethesda and ABK have a service that anyone with a phone or controller can access via a smart TV. Suddenly MS pulls their games from all other cloud services, what happens? They have an immediate monopoly on cloud gaming.
Now the logic from the CMA is flawed because it doesn’t consider what Sony’s movements will be, we all know in a world where hardware goes Sony are likely to move towards cloud as well and will very likely make a huge amount of money given their popularity.
Herein lies the issue - CMA looking into potential future scenarios where MS will become big bad but completely ignoring the fact that Sony will need to enter the cloud market in a big way as well and they will instantly surpass a MS/Bethesda/ABK combination.
Completely agree with this. The CMA have erred in that what they haven’t considered is the deal only gives MS structural advantages over existing market players and small market entrants. But there is nothing about this deal that would block a large publisher (Sony or EA or others) with significant IP libraries from entering the market.
This is the crux of why I don’t think a block was a reasonable result. BUT its also sadly not grounds for an appeal. You can’t argue that they are ‘legally irrational’ sadly because they’ve ignored the fact that most of the structural advantages MS have aren’t linked to this deal. Its nonsensical. But not legally irrational as per the CAT definition.
The problem with this is that they can also eliminate potential benefits for consumers that they can get from innovations/breakthroughs. No governments can control who can succeed/become big, and clamping down on it will have an effect on industry breakthroughs and innovations, so things will get stagnant, leading to little growth, and I dont think the UK or other nations want that. Regulation can’t be and won’t be perfect, its just the reality.
I think having EC final remedies before the CMA decision would have been helpful and would have gotten MS across the finish line as a strong remedy would have been taken in account by the CMA, at least when it comes to monitoring.
I would say once again, the prohibition is flawed as the fundamental level without needing to dive into too much details. As the SLC is within the cloud market, currently a very small market, a prohibition is disproportionate as remedies should only address SLC in that market.
CMA allowed themseleves to be flexible against their own guidelines.
Neither of which will happen though. MS not being able to buy ABK does not affect the UK economy. Besides the prime minister and his lot have done far more damage to the UK’s economy than anything else.
Im merely stating what is legally allowed, not whats probable. You mentioned above CAT could only send it back to the CMA and that just not true, they have overturned the CMA on a number of instances in the past.
I think that the remedies the CMA could accept would be divestiture of Xcloud or divestiture of what they consider key IP - they named COD, WOW, Overwatch.
The bits I’ve read suggest that the IP would mean divestiture of Acti and Blizz.
One assumes that these were the only things the CMA could accept. MS offered a behavioural remedy that fell short of their tests and seemingly the requirements that would meet those tests were not possible to deliver.
To my mind the fact the CMA (who behave like this all the time not just in this case) aren’t engaging in dialogue right till the end to find suitable remedies is incredibly poor. The bottom line for me is they behave with a sense of self importance. They could and should have 2 weeks ago said to MS ‘we can’t accept this because of X,Y,Z what can you do to fix that’. MS might have been unable to but weren’t given the chance.
Brad Smith is correct this is just poor. But the CMA haven’t specially picked MS out here. Its how they are.
But the data the CMA base their verdict on is only 2 years. Basing a prediction of the market for the next 10 to 20 years on this is absolutely insane. Where can i find this argument in their paper? i only read the summary.
If they alone prevent the deal based on their assumption of the market development, of course they are also on the hook for future development in this market. They are influencing the outcome. Even worse, they are influencing a young market. You can’t then go on and say 10 years later: sorry wasnt me.
I think the problem people are actually having is that you are revising history a bit to suggest your “known” was a guarantee, but that directly contradicts dozens of analysts suggesting the CMA would pass due to the remedies provided, or the tone shift CMA took publicly just weeks before the announcement.
It’s not just that you’re driving conversation, which isn’t inherently a bad thing, but that you’re doing so down a road that’s not been paved and you’re telling everyone it always was… just some food for thought.
Plenty of both in the CMAs reasonings. Blocking a merger for 1% of the market. The fuzzy math. Im also going to put illegal out there. There’s no way thats not deliberate.
If I were MS i would argue that they have no faith in the CMA to judge it professionally due to their many many errors and allow the deal as per the remedies offered. Why bounce the decision back to a bunch of error prone morons.
CAT has authority to overturn any CMA decision directly but on mergers the CMA has huge leeway and space in law so in practical terms its not happening and best case scenario is remittal for the CMA to re-run their process again with whatever points of procedural error or irrationality MS win in the CAT factored in.
I can call it illegal if they have fudged numbers with malice and they have more than once. Incompetant if its not deliberate and corrupt if it is. I wouldnt want my merger to be decided by either.
The leeway is irrationality. If we go back and look at Meta the ONLY reason that CAT did not overturn the decision was because Meta owned 70% of the market (an large, robust current market). They point to that over and over. The rest of the argument was speculative and by their own admission faulty and ripe to be overturned. Their messaging in that ruling was likely supposed to be a message to the CMA for the future, but they didn’t listen.
I dont know what the likelihood is, but the CMA used a number of incomplete amd incorrectly calculated MAU % and marketshare % that will be ripped to shreds. Even in cloud gaming, Microsoft does not have this 70% marketshare that the CMA claimed, it was once again a result of bad (or slanted) analysis and poor math.
When Microsoft makes their case at CAT it will be clear that Microsoft owns less than 30% of the nascent cloud market and that the CMA failed to make a solid argument of why Microsoft with Activision Blizzard Inc would have an advantage over current cloud competitors thats insurmountable over current and future entrants (Tencent, Embracer, Nintendo, Apple).
Indirectly, it might. Microsoft is a huge employer, when UK irrationally obstruct its business opportunities, MS will look to expand elsewhere.
Tho specifically for games, Microsoft has always been UK centric and they should finally expand into the continental Europe regardless of the outcome here - Xbox needs the flavor mainland developers could provide.
I’m not saying it was ‘my known’. Pre announcement of the acquisition the CMA view on behavioural remedies was known. They haven’t changed this for this deal. This document was published in December 2018. There was also a ton of commentary from people in the UK explaining that the CMA do not like behavioural remedies. It wasn’t like they just invented that.
This is the CMA remedy guidance. It was published in 2018. Its been referred to often during the process but its not a hidden document.
I quote one part:
Behavioural remedies are unlikely to deal with an SLC and its adverse
effects as comprehensively as structural remedies and may result in
distortions when compared with a competitive market outcome.