I believe CAT is still part of the CMA so he will more than likely go in with the same anti big tech views and I don’t expect him to be fair, there should be a 3rd party reviewing this process like courts can in the US, there’s a reason the FTC wanted to have total power over deals and for courts to not be able to review their decisions in the bill Warren wanted to pass, they want to be like the CMA.
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Microsoft will still try to appeal the decision in CAT, if they win and CMA still blocks the transaction, I can imagine MS threatening to leave the country. Just imagine the costs of switching to Linux for the entire country, yeah it’s free, but knowing terminal is still an essential part of the Linux experience, teaching that to all the employees in the entire country would take a looong time.
And I feel MS would be justified to do so if there are no checks and balances to uphold a court verdict. But if the appeal fails, they’ll simply accept it.
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Justice Smith is the President of the Competition Appeal Tribunal (“CATribunal” or “CAT”), which he has been since 2021, as well as one of the judges of the Patents Court, which is part of the Chancery Division of the High Court of Justice (previously known as England & Wales High Court, thus still abbreviated as EWHC).
There is another UK judge with a dual antitrust/patent focus_ many of my readers know–and some even personally know as a former colleague (patent litigator)–Mr. Justice Richard Meade. He is the judge in charge of intellectual property, but he’s also a member of the CAT bench. While it’s almost inconceivable that Justice Smith would not be involved with the “ABK” (for “Activision Blizzard King”) case, Justice Meade may or may not be on that panel as well.
It bodes well for Microsoft’s appeal that at least one judge with patent expertise will be involved. That’s because the CMA’s decision gets technology and technology markets completely wrong. The CMA’s Inquiry Group was biased, incompetent, and did not even get basic math right (which is why they had to amend their provisional findings and drop the primary of theory harm after Microsoft pointed out they had subtracted only one year of costs from five years of foreclosure benefits). The members of that group–mostly with a financial services background–don’t understand technology in the slightest. Some of what they’ve written in their ruling has made the CMA the laughing stock of gamers on social media and discussion boards. Patent-specialized judges are jurists, not engineers, but they develop a good understanding of technology and that’s why it would be great if not only Mr. Justice Smith as the President of the Court but also Mr. Justice Meade became involved. I don’t think any CAT judge will buy the Inquiry Group’s absurd vision of the future of cloud gaming, but judges with a strong grasp of technology will find it even easier to see that the CMA ruling is plain stupid.
In September 2021, I commented on Justice Meade’s presentation at a Chinese conference and noted that “Justice Meade stole the other European judges the show in terms of content, structure, and presentation (despite not switching into full-screen mode): low-key but world-class.”
(…)
In a decision in which Mr. Justice Smith participated–saw that the CMA broke the law in a case against Apple. While I actually agreed with the CMA’s objective in that case, I also saw the problem with clear statutory declines. The CAT was able to quickly overrule the CMA.
(…)
(…) Microsoft-ABK is not a case like Meta-Giphy, where the CMA made an aggressive decision (though easily distinguishable) that the CAT–again with Justice Smith presiding–quashed and referred back. On remand, the CMA arrived at the same conclusion, and the deal fell through. But in the Microsoft-ABK case, there’s just one laughable theory of “harm” left, and if that one is quashed for fundamental reasons, the CAT may be able to resolve the case right away. It’s interesting to see that the CMA doesn’t really respect the CAT: in its Microsoft-ABK decision, it cites all sorts of input from industry players making predictions for how important cloud gaming will be in “7-10 years” or in “10-15 years” despite the CAT clearly having told the CMA the following in the Meta-Giphy case (…)
The CMA just tries to navigate around the Giphy decision without admitting that they don’t respect it:
(…)
This case will be the most important one in the CAT’s history
(…)
Justice Smith presided over the Optis v. Apple FRAND trial last year. It started in June 2022. I was even considering flying to London to follow it, but ultimately obtained only indirect information. During that trial, I received an email from someone actively involved with the proceedings:
“I have been sitting in on the Optis v. Apple ‘Trial E’ in London all this week and thought you might like to know your name and your blog has been mentioned repeatedly during the trial.”
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The problem isn’t whether he will be fair or not since the issue here is Microsoft has to prove the CMA’s decision as irrational, it would be different if they were just arguing over the judgement without it being under irrationality. All the points we’re making here might not be considered under this judicial review. CAT needs to be a court that simply judges based on the law and merits not stifled to some nonsense.
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Yes they do. In their 2018 guidelines it states that clearly. Paragraph 3.24.
Interesting timing and reporting by The Telegraph, a pro-Government newspaper.
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Ouch.
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I think the fate of the MS-ABK deal depends on the European Commission decision. If the EC approves the deal, it will go through. If they block it, it will be over.
Personally, I think the EC will approve. Then, it will be just a matter of time.
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Barring something unprecedented and unforeseen its fate has already been sealed by the CMA. It’s very hard as per the article from Tom to see how it proceeds now.
Not least because they will need to negotiate a long extension and no doubt ABK may be unwilling or want very very large exit penalties in there.
Problems like this is what made ABK for sale. They certainly need this deal to close stop these atrocities that is killing their company.
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I don’t believe that. I’m of the opinion Microsoft will do whatever to bypass the UK ring fence, a onetime fine or whatever that is assuming the EC approves. They are not going to get clearance from everyone and walk away just based on a decision that is devoid of understanding. If this decision was fair and just then yes as you would expect all regulatory bodies to follow.
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There’s one case where CAT upheld appeals from BMW and Volkswagen where they cannot demand data from outside UK, perhaps there could be a scenario where MS wins at least an appeal against global blocking of the deal.
UK have powers to fine annually and soon to issue daily fines for non compliance. In the real world they are incredibly unlikely to proceed without approval in the U.K.
https://t.co/92gxAc9nU3” / Twitter
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That maybe I just don’t see it. If the EC approves and this appeal falls I see them ringfencing. I don’t think Brad smith’s threats were idle.
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Correct. Unless the EU is of the same findings this isnt going to end well for the CMA.
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Apart from the ‘MS will pull out of UK nonsense’, that was a surprising clip from the right-wing, government supporting GB News. Surprising because they’re not supporting the CMA.
There’s also this (which has been suspected for some time but confirmed this weekend):
No business here please thank you, we’re British.
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If I’m not mistaken, all of that is possible and likely by the CMA but the fine itself can be fought in the normal courts
The UK doesn’t even have a trade deal with the US to enforce such fines. They won’t get a trade deal with the US with their current regulatory setup either, they’d need to provide oversight or US would provide override if they want a trade deal.
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