LONDON, Aug 23 (Reuters) – The long-running battle between Microsoft (MSFT.O) and Britain over the deal with Activision Blizzard (ATVI.O) took another twist on Tuesday, raising more questions only answers on the country’s approach to agreements. the post-Brexit era.
Britain’s Competition and Markets Authority (CMA) has been embroiled in a dispute with the US software giant over its $69 billion bid to buy the ‘Call of Duty’ maker, ever since it opposed the takeover in April.
Microsoft had said in July, just minutes after the U.S. regulator failed in its own attempt to block the takeover in court, that it was willing to revisit the case when Microsoft returned with a “detailed and complex” proposal. .
On Tuesday, she said she would stick to her original decision to block him.
But it will consider a separate restructured deal proposed by Microsoft, in which Activision would cede its cloud streaming rights to a third party – France’s Ubisoft Entertainment (UBIP.PA) – excluding the European Union.
The exclusion is intended not to upset an agreement with Brussels under which Microsoft licenses content to competing cloud services.
EU antitrust regulators responded that they would now consider whether the new terms would affect concessions they had already agreed with the US firm.
Ronan Scanlan, a competition lawyer at Arthur Cox in Dublin who previously worked for the CMA, said no one was well served by the “uncertainty and confusion” in Britain.
“Some might say the CMA went out of their way to accommodate Microsoft, others that it was a consequence of the CMA going too far,” he told Reuters.
HARD POSITION
The CMA had opposed the world’s biggest gaming deal, fearing it would stifle competition in the nascent cloud gaming industry, and said a bid from Microsoft to make Activision’s games available on major competing cloud gaming platforms was not enough to address his concerns.
The move underscores the CMA’s tough new stance on big tech after it became a stand-alone regulator following Britain’s departure from the European Union.
Gustaf Duhs, a former CMA lawyer and chief competition officer at Stevens & Bolton, said the new proposal goes beyond behavioral remedies, which the CMA never liked, to move closer to a structural remedy. .
“But it’s not a clean structural solution because there is still fundamentally a link between Microsoft’s business and Ubisoft’s business, and it’s limited rights that are being transferred,” he said.
The CMA could seek assurances on how Ubisoft would be able to use the rights, which would bring the concession back into the realm of behavioral remedies, he added.
Scanlan said that under the recently proposed deal, the Microsoft-Activision merger would offer single-player gaming content, which would be allowed to market the rights to other cloud gaming service providers.
He said one has to ask whether the time it took to get to this point was well spent for all parties involved. “Few people, other than maybe the CMA, would answer yes,” he said.
Antony O’Loughlin, head of litigation at law firm Setfords, agrees. “For Microsoft and other regulators, this probably represents an unnecessary step that the company has been forced into by an overzealous UK regulator, who has yet to greenlight the deal,” he said. -he declares.
The fate of Microsoft’s deal in Britain raises questions about whether the CMA has the power to frustrate a mega-deal if it is not in tune with the United States, the European Union and the China.
The CMA blockage in April sparked fury from the merging parties, with Microsoft saying Britain was closed for business.
He said on Tuesday that he felt no political pressure over the way he handled the deal.
Tom Smith, a partner at law firm Geradin Partners and former chief legal officer of the CMA, said both sides would present the outcome as a victory, with the CMA getting concessions no other agency had.
The CMA will also avoid having to defend its initial block in court, and Microsoft finally seems ready to close its deal.
“It’s been a torturous process and it’s still possible for the cogs to come loose, but we shouldn’t expect Big Tech deals to happen these days,” Smith said.
The CMA will now consider the new proposal, with a deadline for an announcement before October 18. It could order a much longer investigation if it feels it still has competition concerns.
Reporting by Kate Holton and Paul Sandle in London Additional reporting by Martin Coulter in London Editing by Matthew Lewis
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