There’s no doubt you’ve already started seeing a few hot takes on the CMA decision to ‘prevent’ the Microsoft Activision deal.
We sought out reactions from people who would know a little bit more about the subject matter than most gamers, so let’s read a few informed reactions to the news and learn what we can.
We’ll start with video game market analyst Matt Piscatella. Matt used to be an analyst with the NPD but now does this work for a new company, Circana.
On Twitter, he stated:
“The takes are hot and flowing today.
Anyways it’s (imo) odd to point to what a market may (or may not) look like in ten years to block something today.
And the cloud market isn’t growing all that fast. Whole thing seems a bit off. Oh well, off to appeal everyone goes.”
Matt’s point is that it’s odd for the CMA to preemptively block the Microsoft-Activision deal based on expectations of what the cloud market could become ten years from now. Microsoft’s bet is not set on solid footing, and they may be completely wrong on how their predictions are going to play out.
Matt’s argument here is not so much to focus on hypotheticals, but to point out the shaky logic behind the decision.
Moving on, Sam Dumitriu is a researcher at a UK based entrepeneurship think thank called The Entrepeneurs Network. There have been a few tweets from UK based accounts chiming in on the politics of this decision, but it seemed best to get a reaction from someone whose job was to study business in the UK.
This was his reaction on Twitter:
“It is really hard to see how consumers benefit from this extreme intervention.
And it raises the question, does the government really want to give the CMA even more powers to intervene in digital markets?”
As you can see, UK citizens aren’t necessarily celebrating this decision. Maybe there are British PlayStation fans who are happy about it, but as Sam points out, this can be seen as government intervention when it wasn’t wanted. In fact, it could be interpreted as overreach from the CMA, a relatively new agency in the UK.
Lastly, we’ll look at Florian Mueller’s reaction. Florian probably needs no introduction, as a decades-old expert in IP related matters. Here, he explains why Microsoft and Activision declared they would appeal the CMA decision:
“What does #Microsoft’s announcement of an appeal mean in practical terms?
1. With less than 3 months left until the July 18 closing date under the original merger agreement, an extension will have to be negotiated in all likelihood.
There may be activist shareholders pushing #ActivisionBlizzard to take the $3B instead of negotiating an extension. But given that the CMA decision meets the “irrationality” standard to be vacated by the UK Competition Appeal Tribunal, it makes sense for ABK to extend.
The CMA’s decisions are more difficult to appeal than, say, European Commission rulings. The standard is very deferential: other than procedural error, one has to show “irrationality”. But it’s not infinitely high: in this case, I believe CAT will disagree with CMA.”
So, without doubting Microsoft’s or Activision’s sincerity in stating that this deal will be good for all parties involved, Microsoft is appealing this deal because they still have a clear case for approval.
As Florian points out, now Microsoft’s and Activision’s lawyers will have to prove that the CMA decision fits the UK Competition Appeal Tribunal’s standards for “irrationality.”
But Florian also states his belief that the Competition Appeal Tribunal will disagree with the CMA and reverse their decision.
Does Florian have a point? At the very least, I have found one case where the Competition Appeal Tribunal did reverse a CMA decision. This has apparently been a very narrow avenue by which companies and institutions gotten CMA’s decisions taken back.
And so now, Microsoft and Activision is in the position of trying to set that precedent for themselves as well.
