Microsoft-Activision-Blizzard Discussion Thread |OT3| - Sony bends the knee!

[MasterChief]

@DixieDean82

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. It’s just not happening. Please don’t listen to Micheal Pacther on this. He’s simply wrong about a ringfence working.

If the EU comes down in MS’s favor i can see their reasoning for continuing the CMA appeal, though. Even if they know were it’s heading.

Behind the scenes, MS and in turn, Xbox should be lining up a new plan and putting this behind them. Whatever that involves.

I agree, it sucks that this will be the main news for Xbox for a while though, especially because the EU will probably approve which will force Microsoft to have to appeal the CMA’s decision, I’ll just look forward to June and beyond and try to ignore anything regarding the ABK deal, it will never not be frustrating how regulators didn’t at least try to act like they care about the anticompetitive practices in the console industry today though, if Microsoft was the company on top right now using the same tactics Sony uses would they be ignored by regulators…? because something tells me they would’ve been investigated and fined for anticompetitive practices…

[DeAd3yE]

@ramosverdiz

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 don’t think that’s going to happen, but then again a lot of things in this entire deal have happened that no one saw coming so who knows?

dont put hoeg with foss and pacter that dude knows more than anyone of them lol

[Whistler]

MS pulling gaming/cloud from the UK theoretically isn’t that far fetched since the market there isn’t that large. Highly unlikely but not impossible if we assume the CMA were playing this on the up and up. However, considering that the CMA just wanted to block this deal and did their best to find a problem to match their solution, I doubt any sort of action where MS agrees to pull gaming/cloud out of the UK would work at all.

[TheRayTracer]

The Times & The Sunday Times

Competition is an intense, relentless process of creative destruction. Its regulation requires humility or you condemn innovation. That’s why the government’s draft legislation for a Digital Markets Unit is so worrying. Instead of a laser-like focus on consumers, the draft bill presented this week would create a sprawling new regulator with terrifyingly broad powers.

Armed with the ability to label big digital companies as having “strategic market status”, the DMU could craft and enforce tailored regulations to micro-manage Amazon, Meta, Google and Apple. Breaching those “codes of conduct” could lead to fines of up to 10 per cent of turnover, while the DMU could force those businesses to restructure and share data, too. The regulator would be “effectively legislator, investigator and executioner”, according to Sir Jonathan Jones KC.

…The CMA, which would house the DMU, is populist on Big Tech. It was mocked for blocking Facebook buying Giphy on the grounds that the Gif library may one day compete selling digital ads. Yesterday Microsoft was prevented from purchasing Activision, the producer of Call of Duty, because the video game could become exclusive to Microsoft’s platforms, despite legally binding commitments otherwise. The Deliveroo founder Will Shu says the authority treated him like a criminal for Amazon merely buying a stake in his company.

If this unaccountable newer quango forces big digital groups to develop UK-specific products, hive off business units or pass data to rivals, Britain’s technology scene and we customers will suffer. Rishi Sunak says he’s been showcasing our companies in Silicon Valley under the banner “Unicorn Kingdom”. Perhaps that’s an apt moniker. With these DMU proposals, Britain’s dream of giving birth to a global digital giant is a fantasy.

[proelitedota (Andrew)]

@Zappy5

They can try but my point is it would need to be introduced as a formal remedy the CMA accept. I think it’s highly unlikely and the people who have mooted it are ones like Pachter who have been clueless all along.

Isn’t the whole point of ringfencing so they can avoid any fines?

Like they spin off all UK operations after closing into an independent company.

[proelitedota (Andrew)]

@howlingmosquito

…Food for thought

cma fines1759×2041 397 KB

The CMA’s fines for non-compliance for the last 5 years The highest is £50 million

None of this are fines for merging despite being blocked.

[anon74828371]

Can the CAT actually overturn and resolve the matter directly (and not decide to remit to the CMA) like I saw some people suggesting or is just speculation / wish ?

I know the CAT annuled CMA’s decision in the Compare the Market’s appeal in 2022 (seems CMA didn’t appeal and reached a settlement after that) but it wasn’t a merger so I doubt it’s the same rules.

For the reasons given in the Judgment, the Tribunal unanimously decided that all of the substantive grounds advanced by Compare The Market (except for Ground 2) succeeded and the Decision is set aside accordingly. In summary, the Tribunal decided that:

1. In relation to Ground 1, the market definition in the Decision was materially wrong and the process by which the CMA arrived at the market definition was flawed. In particular, the Tribunal found that the CMA (i) adopted an inaccurate definition of the consumer side of the market, (ii) failed to properly consider the significance of other channels for the purchase of home insurance by consumers, (iii) fell into error by adopting an approach to market definition which was not “outcome neutral”, (iv) failed to properly test for demand substitutability on the consumer side of the market by incorrectly applying the SSNIP test (Small but Significant Non-transitory Increase in Price), and (v) incorrectly included Narrow Most Favoured Nation Clauses in the market definition assessment.

2. Ground 2 is dismissed. The CMA was correct and justified in considering all of the 32 wMFNs collectively for the purposes of assessing anti-competitive effects, instead of individually assessing whether any given wMFN in and of itself constituted a restriction of competition.

3. In relation to Grounds 3 to 6, the CMA failed to establish that wMFNs had the anti-competitive effects articulated in its Decision. The Tribunal considered that a great deal of the CMA’s analysis as to the alleged anti-competitive effects of wMFNs in the Decision operated at the level of theory or bare assertion, with no significant reference to quantitative evidence (rather, the Decision was principally based on qualitative evidence) and it was extremely difficult for the Tribunal, and Compare The Market, to identify the evidential basis for the effects stated to exist in the Decision. The Tribunal found that (i) there was no reliable evidence upon which to conclude the existence of any adverse effect of wMFNs on either Premiums or Commissions, (ii) the evidence which was adduced by the CMA was anecdotal at best and lacked depth and consistency with the CMA’s theory of harm, and (iii) it was not possible for Compare The Market, and the Tribunal, to test the evidence relied upon in any way. In relation to promotional discounts, the Tribunal did not consider that the competitive structure of the market was harmed, even potentially, through an effect on promotional discounts.

4. Grounds 7 and 8 concerning penalty were not considered by the Tribunal given the Tribunal’s findings on the substantive grounds of appeal.

https://www.catribunal.org.uk/judgments/138011221-bgl-holdings-limited-others-v-competition-and-markets-authority-judgment-2022

The CMA fined CompareTheMarket £17.9m in November 2020](Watchdog fines ComparetheMarket £17.9m for competition breach) over complaints it had prevented insurers from offering cheaper deals on rival sites.

But the ruling was overturned in August, with a tribunal concluding there had been no adverse effect on competition and criticising the CMA’s investigation.

The Telegraph understands the two sides have now reached a settlement agreement, with the CMA agreeing to pay costs of around £4.8m.

In a further blow to the watchdog, the CAT also concluded that the CMA had used an artificially narrow definition of the market and criticised its approach to the use of evidence.

Taxpayer-backed watchdog forced to pay CompareTheMarket £4.8m after...

[AllianceOfficer]

The other alternative is continue to do business in the UK, close the deal. Fight the CMA ruling, get it appealed if you can, if not when they try to fine you, tie that up in court. Just make the process as painful as realistically possible for the CMA. This is what Apple does and they usually win at some point because the other party messes up.

[peter42O]

@DixieDean82

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. It’s just not happening. Please don’t listen to Micheal Pacther on this. He’s simply wrong about a ringfence working.

If the EU comes down in MS’s favor i can see their reasoning for continuing the CMA appeal, though. Even if they know were it’s heading.

Behind the scenes, MS and in turn, Xbox should be lining up a new plan and putting this behind them. Whatever that involves.

Personally, it all comes down to EU. If EU approves the acquisition, then Microsoft should actually go after the FTC first by filing a federal lawsuit against them in order to speed up the process and most likely win the case which means that FTC’s arguments would be dead. Combined with EU and the other as of now 8 regulators that have approved the deal, they can then go battle the CMA.

With that said, if EU blocks it, then I hope Microsoft just moves the fuck on. CMA is telling them to go do it the Sony way so by all means, they should. Go pay for two years of exclusivity on every AAA game they can get from various publishers. GTA 6, COD 2024, Mass Effect, Dragon Age, Monster Hunter World 2, Dragon’s Dogma 2, Persona 6, Wonder Woman, future AC titles, Far Cry 7, Immortals Fenyx Rising 2, etc. and then go after some AA titles and Indies. Completely drown out PlayStation.

Also, no Game Pass. Just two year timed exclusivity because with most of these games, people will buy the Series X/S and look into Game Pass anyway so no reason to go that route. Then, if anyone bitches, Microsoft can just point to the CMA and be like, well, they told us to do it this way and well, we did.

Also, go buy studios. Go get Crystal and Eidos from Embracer because I don’t see Embracer wanting to spend $200M+ on their AAA titles especially with both studios working with The Initiative and Playground respectively and Amazon publishing the next Tomb Raider game. Go get Asobo, Certain Affinity, People Can Fly, Techland, if possible CDPR and Iron Galaxy.

I get what ABK means but if this shit is going to drag out for another three years and they still don’t come away with ABK, then this would end up being a wasted generation and two in a row for Microsoft and put them perhaps even further back than they were coming into this generation.

To me, May 22nd (EU) is either continue this dragged out shit or let it die and move on time.

[TheRayTracer]

@AllianceOfficer

The other alternative is continue to do business in the UK, close the deal. Fight the CMA ruling, get it appealed if you can, if not when they try to fine you, tie that up in court. Just make the process as painful as realistically possible for the CMA. This is what Apple does and they usually win at some point because the other party messes up.

LOL, the Right Wing press over here would have a field day with that, with headlines like:

MS BETRAYS BRITAIN! etc

…I’m not joking. There’s a cost of living crisis over here, so a company worth $2 trillion dollars isn’t going to, or getting, much sympathy over here because they weren’t allowed to buy a video games company.

[Haven (Victor)]

@Zappy5

They keep asking these US lawyers and they keep coming up with this. But the CMA concern wouldn’t be addressed by that as they would argue the IP is still locked away from open competition in the cloud market. Saying ‘well then nobody can have the games on the cloud in your market’ isn’t a solution.

By the CMA’s decision the cloud problem was that facing the UK so this lawyers solution addresses as it is precisely what the CMA has said beside this is no time for Microsoft to play kumbaya, it’s hardball time. The threat of this alone could get the CMA to reconsider.

[proelitedota (Andrew)]

What’s on Microsoft’s side are the facts and the high visibility of this case. What’s on CMA’s side is time and discretion.

CMA makes incorrect decision in the past on cases in the past simply because parties run out of time or the merger simply isn’t important enough to pursue further appeals.

In this case, there is high visibility and high motivation, so if ABK and Microsoft is willing to appeal multiple times then CMA need to be ultimately procedurally correct and proportionate in remedies.

I agree with others that there are more at stake here than just this case. Microsoft need to ultimately decide the path forward for UK, as CMA will no double go after MS’s current lead in AGI.

[proelitedota (Andrew)]

@anon74828371

Can the CAT actually overturn and resolve the matter directly (and not decide to remit to the CMA) like I saw some people suggesting or is just speculation / wish ?

I know the CAT annuled CMA’s decision in the Compare the Market’s appeal in 2022 (seems CMA didn’t appeal and reached a settlement after that) but it wasn’t a merger so I doubt it’s the same rules.

This is not for a merger.

[Haven (Victor)]

@TheRayTracer

LOL, the Right Wing press over here would have a field day with that, with headlines like:

MS BETRAYS BRITAIN! etc

…I’m not joking. There’s a cost of living crisis over here, so a company worth $2 trillion dollars isn’t going to, or getting, much sympathy over here because they weren’t allowed to buy a video games company.

Like he said Apple does it and gets away with it and they are worth more than Microsoft . Microsoft is a business not a social political party their incentive is to their investors. If it were Amazon in this situation, you can be sure they will bully their way out.

[ShinMegamiTenseiX]

@ramosverdiz

Interesting…

“If 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,” Gamma Law Managing Partner David Hoppe told Why Now Gaming. “That would presumably address the CMA’s concerns.”

Possible remedy, just not offer ABK games on xCloud for 10 years un the UK?

No way its that fucking easy. Otherwise theyd do this in every country that blocked the deal.

All i know is CMA are about to get crippled into oblivion.

[howlingmosquito (mosquito)]

@anon74828371

In a further blow to the watchdog, the CAT also concluded that the CMA had used an artificially narrow definition of the market and criticised its approach to the use of evidence.

Exactly what they’ve done with ABK.

[Haven (Victor)]

@peter42O

… like, well, they told us to do it this way and well, we did. Also, go buy studios. Go get Crystal and Eidos from Embracer because I don’t see Embracer wanting to spend $200M+ on their AAA titles especially with both studios working with The Initiative and Playground respectively and Amazon publishing the next Tomb Raider game. Go get Asobo, Certain Affinity, People Can Fly, Techland, if possible CDPR and Iron Galaxy. I get what ABK means but if this shit is going to drag out for another three years and they still don’t come away with ABK, then this would end up being a wasted generation and two in a row for Microsoft and put them perhaps even further back than they were coming into this generation. To me, May 22nd (EU) is either continue this dragged out shit or let it die and move on time.

It won’t go on for 3 years we don’t even know if Activision is on board beyond July. Activision can say they are in support but when the deadline comes for renegotiation they might bail. I think the option now is to look for a way to close at the deadline. if they can get the EU and China, they will have to find a solution for the UK whether it’s ringfencing, getting a motion to close while appeal continues. I do think though if EU and China approve the CMA decision will have to be reversed as it loses weight.

[ShinMegamiTenseiX]

@Haven

It won’t go on for 3 years we don’t even know if Activision is on board beyond July. Activision can say they are in support but when the deadline comes for renegotiation they might bail. I think the option now is to look for a way to close at the deadline. if they can get the EU and China, they will have to find a solution for the UK whether it’s ringfencing, getting a motion to close while appeal continues. I do think though if EU and China approve the CMA decision will have to be reversed as it loses weight.

Cma aint doing shit. They have to be forced to do stuff or ms has to threaten them with closing regardless.

[AllianceOfficer]

@TheRayTracer

LOL, the Right Wing press over here would have a field day with that, with headlines like:

MS BETRAYS BRITAIN! etc

…I’m not joking. There’s a cost of living crisis over here, so a company worth $2 trillion dollars isn’t going to, or getting, much sympathy over here because they weren’t allowed to buy a video games company.

Apple and Google are already dragging things out on all fines, so I dont really think so or it would be happening with them.

[AllianceOfficer]

I do think approval will come from China soon. They like to inject western conflict into things so theyll probably see this as an opportunity to really stir things up.