Sure, I agree. However a 5% chance is all i see at this stage.
Guys, I hate to be negative again, but I see a lot of people still with hope of a ringfence or a CAT overturn. Bar a miracle. Itâs just not happening. Please donât listen to Micheal Pacther on this. Heâs simply wrong about a ringfence working.
If the EU comes down in MSâs favor i can see their reasoning for continuing the CMA appeal, though. Even if they know were itâs heading.
Behind the scenes, MS and in turn, Xbox should be lining up a new plan and putting this behind them. Whatever that involves.
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Iâm operating as if the deal is already dead. Theyâll fight it because they have too but I donât expect the results to change.
Any other outcome is a welcome surprised. Iâm not hopping on the copium train for another year, itâs too draining.
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Microsoft is going to win their CAT appeal, thatâs not really debatableâŚthe real question is what can do they do after since it will just go back to the CMA? The idea of MS leaving the UK is hilarious btw, that would cause international uproar
I was watching the Xbox Two Podcast and Jez Corden (whoâs from the UK) said it best, the way Microsoft can get this approved is to offer the UK something that benefits the government. If I were MS, Iâd go to the UK government and say
âListen, you get our deal approved and we will throw in a few data centersâ
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There isnt a world where Microsoft continues business in the UK at all if they are concerned about the UK using this precedent and going after AI. Its suicide for their company. Based on what the CMA has said since the block, they have every intention of attempting to kill big tech. Thats not a feasible place to continue doing any business at all in. The options if the EU approves are to get CAT or the prime minister to overturn (in which case the precedent to abandon is all major regulators blocking), exit the UK, or continue doing business and either pay or fight any fines.
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Pachter is 100% correct about a ring fence. Microsoft is in the right here. The CMA lied. Its enough to get it thrown out and approved by CAT directly.
And to top it off Kotick has now planted the seed of collusion, so now there are potentially illegal issues.
Or they will close and pay a fine and fight the ruling for years until they get it.
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I do think itâs possible if the EU and CAT approve the acquisition but the CMA continues to block the deal then it is very possible Microsoft could move out of the UK.
If the EU and CAT block the acquisition then the deal is dead and Microsoft would have a better chance at acquiring studios and publishers outside of the UK.
The CMA doesnât care about facts. Their entire case was a farce from the outset. Microsoft pointing to the EU wonât change their minds. The CMA knows they arent operating on facts. No genuine regulator would ignore the biggest PC store or Nintendo.
Thats why no other regulators have.
Its better to appeal to the CAT to demonstrate how incompetant the CMA are and how their case was about inventing markets to stop the deal rather than investigate whether it was beneficial to consumers.
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I donât think CAT approves, they just point out faulty logic and reasoning in the CMA report, they donât even judge the merits of case. Yeah the numbers all show that the acquisition should go through but CAT doesnât judge that, they just judge how the CMA got to the conclusion they arrived at
The reason why MS will very likely win their CAT appeal is because of this, that the CMA used heavily skewed metrics and flawed math that Microsofts lawyers are going to tear apart and fine tons of holes in. These are the procedural errors that CAT can overrule the CMA and send it back for the CMA to look at it again.
The challenge is what can MS do the second time around when the CMA does a second review?
I do actually see a decent chance for overturn after appeal, but the other suggestions really are just fantasy & I agree with you on that part. Personally - Iâve never particularly cared about this deal - Iâm interested in 0% of ABKâs game portfolio - but I do see the value of it and of using the IPs to try to drive growth for mobile ambitions outside of the cloud variety. Anyway will be interesting to see
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Thatâs the problem because if Microsoft doesnât fight this then the CMA will continue to ignore the facts and keep hurting consumers. So I am hoping there is something Microsoft could do that could get the acquisition approved without the CMAâs approval.
Even if CAT doesnât fully approve if there is enough evidence that the CMA overlooked a lot of the facts and didnât do a thorough investigation then it will reflect on how bad the CMA handled this case. And hopefully there is a way they can overrule the CMAâs decision.
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InterestingâŚ
âIf the decision stands and the deal receives approval in other jurisdictions, Microsoft could geofence the Activision games [on its cloud service] out of the UK,â Gamma Law Managing Partner David Hoppe told Why Now Gaming. âThat would presumably address the CMAâs concerns.â
Possible remedy, just not offer ABK games on xCloud for 10 years un the UK?
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I consider the CAT appeal to be Microsofts second shotâŚone thing is absolutely clear here, Microsoft was clearly blinded sided and it seems that they just didnât have enough time to offer the CMA adjusted remedies to address their concernsâŚnow they know what the concerns are and can address them directly
2 things in particular, CMA was concerned about a Game Pass price increase, offer to not raise the price in the UK for X number of years
Also CMA wanted MS to allow games to be played nativelyâŚOK now this one is trickyâŚlike how do you play COD natively on a Samsung TV? Maybe offer the allow games to be played natively where its technically feasible?
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They keep asking these US lawyers and they keep coming up with this. But the CMA concern wouldnât be addressed by that as they would argue the IP is still locked away from open competition in the cloud market. Saying âwell then nobody can have the games on the cloud in your marketâ isnât a solution.
The attorney in question is an international transaction lawyer who likely knows more about the process than anyone on an internet forum or even the so called experts like Pacther, Hoeg, Foss etc
That being said I personally donât think thatâs going to happen, but then again a lot of things in this entire deal have happened that no one saw coming so who knows?
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Food for thought
The CMAâs fines for non-compliance for the last 5 years
The highest is ÂŁ50 million
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Wow good find, 50M euros is 55M USD
Although it might be more than money, it might be just be bad PR, even though 50M euros to Meta is couch change, they still divest Giphy
MS would not pull out of the UK. 100% not happening.
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Iâve seen numerous tweets and various posts on a couple of gamer discussion boards where people looked at the CMA decision and immediately identified that the CMA got the cloud-gaming market share figure wrong. 60-70% is crazy. In fact, even the Sony-supported class-action lawyers (who filed their opposition (PDF) to Microsoftâs motion to dismiss their amended complaint a few hours ago) arrived at 40%. Even that number is too high. The difference may be due to a simple fact: at some point a number is not just wrong by U.S. standards, but gives rise to a Rule 11 violation with potential sanctions on counsel. The CMAâs Inquiry Group, however, does not have to respect a similar rule. It can say whatever it wants, though the Competition Appeal Tribunal wonât find it hard in this case to identify âirrationalâ findings (thatâs officially the standard of review).
Yes, it cannot be rationalized what the CMAâs Inquiry Group did, just like comparing five years of benefits to one year or profits couldnât be rationalizedâbut that wasnât a final decision. At least there was an easy fix. But they essentially imported all of their crazy earlier theoriesâthe conglomerate theory about Windows and Azure as well as the PlayStation theoryâinto the remaining theory, in illogical ways.
I expect May to be a great month for the merger, with additional approvals, another ruling by a U.S. federal judge against a Sony-supported private lawsuit, and the slam-dunk appeal (and possibly more and more criticsm, through public statements and private communications with UK politicians) of the CMAâs miscarriage of justice.
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Not fully pull out but in the future they totally could. And prioritize areas where Microsoft can grow and innovate.