LONDON, Aug 23 (Reuters) – The long-running battle between Microsoft (MSFT.O) and Britain over its deal with Activision Blizzard (ATVI.O) took a new turn on Tuesday as Britain’s deal It raised more questions than answers about its approach to The post-EU era.
The U.K.’s Competition and Markets Authority (CMA) has been embroiled in a dispute with the U.S. software giant over a proposed $69 billion takeover of the “Call of Duty” maker since it opposed the deal in April.
The company said it would re-file the lawsuit when Microsoft returned with a “detailed and complex” proposal in July, just minutes after U.S. regulators failed in their own efforts to block the acquisition in court. He said he was prepared to look into it.
On Tuesday, it said it would stick to its original decision to block.
But the company plans to consider another restructuring deal put forward by Microsoft, in which Activision will give its cloud streaming rights to a third party outside the European Union, France’s Ubisoft Entertainment (UBIP.PA). going to sell.
The carve-out is designed to not undermine Microsoft’s agreement with Brussels to license its content to competing cloud services.
In response, EU antitrust regulators said they would consider whether the new terms would affect concessions already made with US companies.
Ronan Scanlan, a competition attorney at Arthur Cox’s office in Dublin and formerly with the CMA, said no one was being treated well by the “uncertainty and turmoil” in the UK.
“Some might say the CMA bent backwards to fit in with Microsoft, and others would say it went too far in the first place,” he told Reuters.
tough stance
The CMA opposes the world’s largest gaming deal over concerns that it will stifle competition in the nascent cloud gaming space, and Microsoft’s proposal to make Activision’s games available on rival cloud gaming platforms puts an end to those concerns. said not enough.
The decision highlights the CMA’s new tough stance on big tech after it became an independent regulator following Britain’s exit from the European Union.
Gustav Dous, a former CMA attorney and head of competition at Stevens & Bolton, said the new proposal moved beyond behavioral remedies, which the CMA never liked, to something closer to structural remedies.
“However, this is not a clean structural remedy because there are still fundamental links between the activities of Microsoft and Ubisoft, with limited rights to be transferred,” he said.
The CMA could seek assurances about how Ubisoft can use its rights, which would bring the concession back into the realm of behavioral remedies, he added.
Scanlan said under the newly proposed deal, the combined Microsoft and Activision will only provide game content to one player, who will be allowed to commercialize rights to other cloud gaming service providers. said to be.
He said we need to ask whether the time it took to get to this point was worthwhile for everyone involved. “Except perhaps the CMA, few would answer in the affirmative,” he said.
Antony O’Loughlin, chief litigator at law firm Thetford, agreed. “For Microsoft and other regulators, this is probably an unnecessary step that the company was forced to take by overzealous UK regulators who have yet to green light the deal,” he said. high,” he said.
The fate of the deal with Microsoft in the UK raises questions about whether the CMA has the power to crush the mega deal if it doesn’t keep pace with the US, European Union and China.
The CMA block in April sparked outrage among merger parties, with Microsoft saying the UK was shut down.
The company said on Tuesday it felt no political pressure to handle the deal.
Tom Smith, a partner at law firm Geraldine Partners and a former CMA legal director, said the result was seen as a win for both sides and the CMA secured a concession that no other agency had been able to get. Stated.
The CMA also eliminates the need to defend the original block in court, so Microsoft appears poised to finally secure the deal.
“The process is tortuous and there may still be room for the wheels to come off, but you shouldn’t expect big tech deals to go well today,” Smith said.
The CMA will now consider new proposals and has set an October 18 deadline for announcements. If we determine that there are still competitive concerns, we may order a longer investigation.
Reporting in London by Kate Holton and Paul Sandle Additional reporting by Martin Coulter in London Edited by Matthew Lewis
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