Microsoft Corp’s US$69 billion takeover bid for games developer Activision Blizzard Inc came back from the brink after the EU gave its blessing for one of the biggest deals in history.
In a decision diametrically opposed to findings by British and US antitrust authorities, EU regulators on Monday said that the transaction could actually boost competition and make the fledgling cloud-gaming market better.
While EU Commissioner for Competition Margrethe Vestager’s team has raised hopes in Redmond, Washington, and Santa Monica, California — where Microsoft and Activision have their respective headquarters — the duo still face a formidable task convincing UK and US judges to side with them in legal challenges.
Photo: Bloomberg
The hardest fight could be in Britain, where the firms must receive a positive ruling from the specialized Competition Appeal Tribunal (CAT), a court with a narrow remit and a history of siding with the officials who pen the initial decisions.
Microsoft is expected to formally file its appeal with the tribunal by the end of the month.
“I struggle to see what can be done,” said Pablo Ibanez Colomo, a law professor specialized in competition at the London School of Economics and Political Science. “The standard of review in merger cases in the UK is deferential,” meaning that “the grounds on which the decision can be annulled are quite limited.”
If deference is a factor, then the CAT would be mindful of comments from British Competition and Markets Authority (CMA) chief executive Sarah Cardell, who responded to the EU’s announcement in an unusually blunt fashion, highlighting how commitments accepted by Brussels would allow “Microsoft to set the terms and conditions for this market for the next 10 years.”
“They would replace a free, open and competitive market with one subject to ongoing regulation of the games Microsoft sells, the platforms to which it sells them, and the conditions of sale,” Cardell said.
Earlier on Monday, Vestager dubbed the deal a “pro-competitive” merger that would help to “kick-start” the cloud streaming market.
She said the EU saw merits in Microsoft’s remedies offering, with her team noting how 10-year licensing deals for rival platforms represented a “significant improvement for cloud-game streaming compared to the current situation.”
Microsoft president Brad Smith praised the EU decision as empowering “millions of consumers worldwide to play these games on any device they choose.”
Activision CEO Bobby Kotick said the EU conducted a “thorough, deliberate process to gain a comprehensive understanding of gaming.”
Microsoft’s and Activision’s lawyers would use it “to provide greater ballast to their appeal of the CMA’s decision which is in the works,” said Alex Haffner, competition partner at London law firm Fladgate LLP.
When the US Federal Trade Commission (FTC) sued to block the merger in December last year, Microsoft maintained it still had avenues for approval. The Xbox maker’s plan was to persuade UK and EU authorities to accept a global behavioral remedy, then return to negotiations with the FTC. If the US regulator refused to budge, the company wagered it could persuade a US judge that those binding global remedies resolved the competition concerns.
That strategy has suddenly become much more challenging. As it stands, the FTC trial is not set to begin until early August and is not likely to produce a decision until the end of the year.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his