CMA blocks Microsoft’s acquisition of Activision – a tale of the unexpected

 

CMA blocks Microsoft’s acquisition of Activision – a tale of the unexpected

The UK’s Competition and Markets Authority (CMA) has prohibited Microsoft’s $68.7 billion purchase of Activision Blizzard.

The CMA has found that the transaction may not be expected to result in competition concerns in console gaming services in the UK, but that it may be expected to result in a substantial lessening of competition in cloud gaming services in the UK.

The CMA has decided to block the deal instead of accepting Microsoft’s proposed remedies, stating “significant shortcomings”. According to the CMA, the rejected remedies would be tantamount to requiring the agency to regulate what is the “growing and fast-moving” worldwide cloud gaming sector. Microsoft had proposed to license a set of Activision games to competitors for use in cloud gaming services, but the CMA rejected the proposal. This was mainly because it did not cover different cloud gaming business models and was not fully open to rivals who might want to offer different versions of games other than on the Windows operating system.

This is the second ever CMA prohibition of an acquisition by a major tech giant, following the order to Meta to unwind its acquisition of Giphy.

In the course of the second stage review, the CMA retreated from its initial view that only a divestiture could allay its concerns and focused increasingly on the cloud gaming sector. However the remedy proposals did not go far enough, and the CMA has opposed replacing the pre-merger competitive situation with what it views as ineffective regulation in a dynamic market.

The ban comes about a month before the European Commission is to issue its own findings in its second phase probe. The Commission is currently market testing proposed commitments which also involve licensing. However, other global antitrust authorities, including in South Africa, Brazil, Chile, China and Japan have already cleared the deal, mainly based on licensing commitments.

But this not may be the end of the transaction. Late revisions to the CMA’s provisional findings could form the basis for an appeal.

https://www.gov.uk/government/news/microsoft-activision-deal-prevented-to-protect-innovation-and-choice-in-cloud-gaming

 

Competition Appeal Tribunal will jointly case manage collective actions in maritime carriers cartel action

 

Competition Appeal Tribunal will jointly case manage collective actions in maritime carriers cartel action

 

In a novel judgment on case management, the Competition Appeal Tribunal has published an order in the Mark McLaren Class Representative Limited v MOL (Europe Africa) Ltd and others collective damages action. The CAT has ruled that the McLaren proceedings will be jointly managed as one case together with Volkswagen’s standalone damages action.

The defendants in the claim were addressees of the European Commission's February 2018 decision, under the settlement procedure, establishing a cartel between maritime car carriers.

At this stage the CAT has not yet ruled that the cases raise ubiquitous matters relating to overcharge and pass-on – the overlapping elements of the claims. The CAT noted there was a real likelihood that an Umbrella Proceedings Order would be needed. Smith J said that the respective claimants “inevitably have to advance different and almost certainly inconsistent cases” as to who paid the unlawful overcharge.

The order sets out a timetable for McLaren class representatives and Volkswagen claimants to file and serve relevant documents, witness statements, expert reports and evidence to parties to both proceedings.

The order lists the main trial in the McLaren proceedings for 2025, with a provisional time estimate of 10 weeks, and main trial in the Volkswagen proceedings for 2026.

The ruling shows that the CAT is trying to use its case management powers to avoid inconsistent decisions in cases involving overlapping issues.

https://www.catribunal.org.uk/sites/cat/files/2023-04/2023.04.06_1339_1528%28T%29_Order%20of%20the%20Tribunal%20%28Directions%20to%20trial%29.pdf