Microsoft Acquires Activision Blizzard

[Sheikah]

Worldwide consistent internet for allow for lag free gaming wherever you go? It may be coming, but I doubt we'll see that kind of stability in our lifetime. 

Given that when I was a teenager we used to connect to internet via dialup, and now we can stream in 4K, I think you are drastically underestimating what will be achieved in our lifetimes.

[Choze]

Thanks Julius, Ronnie.

The EU may also block after this. Keen on the result.

Its a good surprise that the CMA are stepping up. The US is looking exciting with the Google breakup case. The EU is making more progress on privacy and data.

MS are looking really awful right now. Same attitude as with the US FTC case. Just a reminder of why these firms are so dangerous. MS think they should be above the police. 

RE: Cloud. Things can happen suddenly. Which is why this enforcement is necessary (ofcourse MS already are ahead). Also the mainstream may not care about lag at some point. Cloud can take gaming beyond the limitations of devices. Look at how mobile devices like the Switch design are important again. Many will enjoy not worrying as much about the specs.

 

 

 

Edited April 27, 2023 by Choze

[Sheikah]

Thanks Julius, Ronnie.
The EU may also block after this. Keen on the result.
Its a good surprise that the CMA are stepping up. The US is looking exciting with the Google breakup case. The EU is making more progress on privacy and data.
MS are looking really awful right now. Same attitude as with the US FTC case. Just a reminder of why these firms are so dangerous. MS think they should be above the police. 
RE: Cloud. Things can happen suddenly. Which is why this enforcement is necessary (ofcourse MS already are ahead). Also the mainstream may not care about lag at some point. Cloud can take gaming beyond the limitations of devices. Look at how mobile devices like the Switch design are important again. Many will enjoy not worrying as much about the specs.
 
 
 

You're dead right about their attitude. Disgusting bile they're coming out with because they've been denied, threatening the UK and mouthing off against the CMA. Makes them look completely dense, in all honesty.

[Choze]

https://www.theguardian.com/technology/nils-pratley-on-finance/2023/apr/27/ignore-microsoft-whines-activision-blizzard-the-cma-did-its-job

MS are still in a very strong position no matter what.

Good to see the British press pushing back abit. The US bunch were very quiet in comparision when the FTC were attacked. 

 

Important quote:

https://www.bloomberg.com/news/articles/2023-04-27/microsoft-xbox-chief-seeks-to-reassure-game-staff-on-activision?leadSource=uverify wall

Quote

The Xbox chief said the acquisition was intended to speed up Microsoft’s gaming plans, but doesn’t represent the entirety of the company’s gaming strategy, which would move ahead even without Activision, the person said.

 

Edited April 27, 2023 by Choze

[Jonnas]

I'm a bit late to the discussion, but I'm happy the merger has been blocked. Thing was smelly af. I don't care that they did it via cloud gaming, anti-monopoly law can be that weirdly specific.

As for the debate regarding the future of cloud gaming... I'm sure the technology will make it viable soon, but it's likely to be limited in scope regardless (beyond the obvious geographical limitations). By definition, it's going to be less reliable than an actual file/download. Anything that's fast-paced and dependant on precise controls (such as a fighting game) is likely to avoid that route, as will many things handheld/portable.

But that doesn't mean it can't be useful as its own marketplace. You can have slower games (such as turn-based strategy, farming sims, etc.) run on it without latency/slowdowns ever causing much issue, for example. I can see streaming platforms adopt videogame libraries in the near future, even (just not very well curated ones).

[Choze]

https://ec.europa.eu/commission/presscorner/detail/en/ip_23_2705

What a terrible look for the EU.

Proud of the UK CMA here! Also happy about the US stance.

This was being used as a check by so many, to see if the EU were serious about regulating tech. Recent key appointments have been pro tech companies and now this makes for a bad look. I hope the US especially makes progress on their efforts.

The EU remedies are laughable... MS has also hired the best of the best in law firms and lawyers to appeal the CMA. I hope the decision stays.

Edited May 15, 2023 by Choze
Added better EU link for report.

[Sheikah]

https://ec.europa.eu/commission/presscorner/detail/en/ip_23_2705
What a terrible look for the EU.
Proud of the UK CMA here! Also happy about the US stance.
This was being used as a check by so many, to see if the EU were serious about regulating tech. Recent key appointments have been pro tech companies and now this makes for a bad look. I hope the US especially makes progress on their efforts.
The EU remedies are laughable... MS has also hired the best of the best in law firms and lawyers to appeal the CMA. I hope the decision stays.

It's good that the CMA doubled down though, makes me think that they're very likely to stick to their guns.

[Choze]

On 15/05/2023 at 9:01 PM, Sheikah said:

It's good that the CMA doubled down though, makes me think that they're very likely to stick to their guns.

I sure hope so! These agencies are very weak currently. The tech companies only accept zero regulation. Lobbying has been absolutely in your face by MS. Despite daily UK headlines on sleaze!

Good stuff happening too! More awareness of tech tactics/loopholes but also conversations around harm. Tech competition often more accurately partners (MS and Nvidia gaming + AI hype, ChatGPT overlays etc.). Trillions rolling in but disproportionate Innovation burdens and costs on others. Harm being like sugar/smoking/pollution where its not so obvious (similar lobbying).

[Choze]

 

https://www.bbc.co.uk/news/world-us-canada-65817558

https://www.ftc.gov/news-events/news/press-releases/2023/06/ftc-will-require-microsoft-pay-20-million-over-charges-it-illegally-collected-personal-information

Quote

According to the complaint, Microsoft combined this information with a unique persistent identifier it creates for each account holder, even children, and could share this information with third-party game and app developers. Microsoft allowed—by default—all users, including children to play third-party games and apps while using Xbox Live, requiring parents to take additional steps to opt out if they don’t want their children to access them.

A reminder the US has a few privacy laws and data can be very fluid: Linkedin, AWS, Shopping, Search, Emails, Storage, Photos etc.

https://www.reuters.com/markets/deals/microsoft-searching-solutions-over-uk-block-activision-deal-president-2023-06-06/

Quote

Microsoft has since appealed and its president, Brad Smith, met British finance minister Jeremy Hunt for talks in London on Tuesday, a government source said, without giving details.

Also in London, Smith told the techUK Tech Policy Leadership conference he was hopeful the outcome could change, adding: "I'm in search of solutions."

"If regulators have concerns we want to address them. If there are problems, we want to solve them. If the UK wants to impose regulatory requirements that go beyond those in the EU, we want to find ways to fulfil them."

Smith was also scheduled to meet officials from the Competition and Markets Authority (CMA) during his visit to London this week, according to reports.

He said he had always been "bullish on the United Kingdom as a great place to live, to learn, to build".

Smith criticised Britain after the CMA veto, saying it would shake confidence in the UK as a destination for tech.

 

Some 'interesting' articles in national newspapers too:

 

Rather heavy handed stuff. The evidence is not on their side though. The UK does well on both Entertainment and Tech. Plenty of bodies and experts keep an eye on UK ecosystems and innovation.

Edited June 6, 2023 by Choze

[Choze]

Quote

The Federal Trade Commission sought a restraining order Monday to block Microsoft from closing its $69 billion purchase of the gaming company Activision Blizzard, the latest regulatory hurdle for the largest deal in the tech company’s history.

https://www.washingtonpost.com/technology/2023/06/12/ftc-microsoft-activision-injunction/

MS's behaviour is something else for sure. They really do see themselves as being above everything.
 

 

[Choze]

https://www.reuters.com/markets/deals/microsoft-activision-ask-judge-speedy-schedule-ftc-challenge-2023-06-14/
 

Quote

 

"Time is of the essence," the companies wrote in a court filing, noting that Microsoft's agreement to acquire Activision has a termination date of July 18 and contains a $3 billion termination fee. "Let there be no doubt, a preliminary injunction ruling is the only decision that matters under these challenging deadlines."

 

 

This is the least confident I have ever heard them. Maybe why they tried to close without permission? Curious what the court will do. $3bn is nothing for MS.

Overall this deal has had a rough time. The 3 bodies that matter all raised issues at minimum. 2 of the 3 ended up outright blocking.

https://www.telegraph.co.uk/business/2023/06/14/big-tech-bullies-humbled-britain-us/

Quote

The suggestion builds on an earlier complaint that the competition authorities had been taken over by “ideologues” who believed “big is bad”. On the contrary, it demonstrates that regulators around the world are less willing to tolerate the relentless acquisitive growth of large corporations if it harms consumers – a shift that should be applauded by anyone that wants to see competition, entrepreneurship and innovation thrive, not squashed.

One would certainly imagine there are plenty of budding start-ups that are secretly delighted to see someone finally standing up to the big bullies of big tech and creating a more level playing field.

The deal is not officially dead but the whole thing is now hanging by a thread and it’s hard to see how it can be saved. The two sides appear determined to take the fight to the courts on both sides of the Atlantic.

In other news the EU is going after Google on ads (following the US) and passed rules on AI.

Edited June 14, 2023 by Choze

[Choze]

https://time.com/6288245/openai-eu-lobbying-ai-act/

Quote

The amendment that OpenAI took issue with was not included in the final text of the AI Act approved by the European Parliament in June. “They got what they asked for,” says Sarah Chander, a senior policy advisor at European Digital Rights and an expert on the Act, who reviewed the OpenAI White Paper at TIME’s request. The document, she says, “shows that OpenAI, like many Big Tech companies, have used the argument of utility and public benefit of AI to mask their financial interest in watering down the regulation.”

Quote

That argument brought OpenAI in line with Microsoft, which has invested $13 billion into the AI lab, and Google, both of which have previously lobbied E.U. officials in favor of loosening the Act’s regulatory burden on large AI providers.

Part of the problem of rushing AI legislation. Enables the existing giants to take hold and keep everyone else at bay.

Implementation of AI would have been much slower without these laws. But hey governments are straight up buying into MS and OpenAI's hype and demands.

[Choze]

Ok. So we have the injunction case starting soon. I found this tweet funny considering MS's always aggressive PR and now having to reverse position for the case.

 

A Zoom link should be available soon if you want to listen in. Am not law based so will wait for outcomes.

Worth pointing out that New Zealand has also found issues with the merger.

https://gamerant.com/microsoft-activision-blizzard-deal-block-new-zealand/

https://gameworldobserver.com/2023/06/20/new-zealand-microsoft-activision-cloud-gaming-concerns

https://comcom.govt.nz/__data/assets/pdf_file/0031/319576/Microsoft-Corporation2C-Activision-Blizzard-Inc-Statement-of-Issues-20-June-2023.pdf

Quote

“We are concerned that these effects may arise as a result of the merged entity either partially or fully foreclosing its rivals in cloud gaming, such as Sony or NVIDIA, from accessing certain Activision content, and in particular the game Call of Duty (CoD), to the detriment of competition in cloud gaming.”

“If the Proposed Acquisition gives Microsoft the incentive and ability to do this, consumers (gamers) may be harmed through higher prices, lower quality, or less innovation in these markets.”

Same CMA argument. Will be interesting to see what Canada and Australia also say.  So far all the main regions/countries have had issues.

Edited June 21, 2023 by Choze

[Choze]

An important point in the USA when it comes to conflicts of interest.

 

ProPublica have also put out great stuff on the Supreme Court Judges and even on the expert witness Microsoft will be using.

https://www.propublica.org/article/these-professors-make-more-than-thousand-bucks-hour-peddling-mega-mergers

 

[Choze]

Canada has also voiced concerns about the deal.

https://www.gamedeveloper.com/business/canada-voices-disapproval-for-microsoft-activision-merger

There is lots happening including other info that we never knew before about Azure, MS, Sony, Nintendo, SEGA. Square Enix etc. Awaiting the US verdict on the injunction.

 

 

 

[Choze]

https://www.ign.com/articles/will-xbox-win-the-ftc-trial-we-asked-the-experts

Great article by IGN.

 

Quote

“We wouldn’t be here if Microsoft had created Call of Duty,” Judge Jacqueline Scott Corley said to lawyers representing Microsoft and the FTC. The law wants people to make their own creative video game smash hits, rather than purchasing them, according to the judge last Thursday.

 

[Ashley]

The FTC has agreed for Microsoft to purchase Activision: 

https://www.theverge.com/2023/7/11/23779039/microsoft-activision-blizzard-ftc-trial-win

And the CMA is apparently going to reconsider it's earlier decision:

 

 

[Dcubed]

Seems like the deal is as good as done at this point.  The CMA know that they have no leg to stand on, with their argument being flimsier than a wet tissue with clinical depression.

[Choze]

5 hours ago, Ashley said:

The FTC has agreed for Microsoft to purchase Activision: 

https://www.theverge.com/2023/7/11/23779039/microsoft-activision-blizzard-ftc-trial-win

And the CMA is apparently going to reconsider it's earlier decision:

 

 

Well the FTC have not agreed whatsoever but the Judge has sided wholly with MS on the preliminary injunction. Plenty of issues being highlighted there with the judge's position and reasoning. Judges are doing a good job of making themselves look bad.

As for the CMA its never a good look for all involved and will look like special treatment or back door deals. Which is what many suspected given MS's actions following the block.

Competition regulators having a lack of power is a huge warning sign. Especially, during a time of increased inflation simply due to a lack of competition and deregulation. The damage to democracies and undermining of capitalism is never a good look no matter how much MS (or any other company doing the same) spin these deals. This is all textbook stuff. Stopping/ not-stopping MS was always a big indicator for academia about where we are headed.

Worth a skim through the ruling: https://storage.courtlistener.com/recap/gov.uscourts.cand.413969/gov.uscourts.cand.413969.305.0_4.pdf

Edited July 11, 2023 by Choze

[Jimbob]

Be interesting to see what happens the next couple of days.  Microsoft could close this deal by Friday at the earliest.

I'm assuming they'll be in discussion with the CMA imminently (if not already)

[Choze]

Yeah they will close quite soon.

The 'Too big to regulate' crowd were correct and won their bets.

https://www.reuters.com/markets/deals/ftc-would-face-tough-appeal-microsoft-activision-order-experts-2023-07-11/

Quote

In her 53-page order, Corley said it was not enough for the FTC to argue that "a merger might lessen competition - the FTC must show the merger will probably substantially lessen competition."

Several legal scholars questioned that standard, saying that the U.S. antitrust law required the FTC to prove the proposed deal "may" harm competition, not that it "will."

University of Baltimore law school professor Robert Lande said "'will probably' is not the same as 'may'" and the judge got the standard wrong.

Interesting. Not my expertise and I have no idea if the FTC will appeal.

Re the business/competition understanding and markets in the judgement: This is such a great example of how Judges are not suited to handling anti trust and competition! The expertise simply isn't there and this Judge contradicts the Judge on the Meta/Within case. She might as well be some random troll person online given her comments about the Switch or PC/Windows gaming! Not a good look whatsoever for their credibility. Of course the pro consolidation crowd/giants will be happy with this result but its really bad for business and competition. Not to mention they already are doing terrible on human rights and democracy.

One key belief I have is that frameworks and theories should not be redacted in these public reports by the agencies. If companies are brave enough to monopolise openly then they should not redact key market figures, frameworks and data. People should get a visual view too. The largest company simply forces their view, which is what MS have done here. They never turned a profit their whole time in the gaming business and tanked games sales with Gamepass. Yet you have people claiming they are geniuses and the best run gaming business DESPITE the evidence.

 

Edited July 12, 2023 by Choze

[Choze]

Looks like certain media outlets and MS PR's frenzied pro merger stances jumped the gun on the CMA agreeing to a new deal.

https://www.bloomberg.com/opinion/articles/2023-07-12/microsoft-and-the-uk-cma-have-opened-a-nasty-can-of-worms

Quote

While the CMA has yet to issue its formal order thwarting the transaction, it confirmed on Wednesday that merging parties can’t suggest new remedies once a final report is published, as is the case here. However, the regulator says they can propose a restructured deal, thereby triggering a new investigation.

Quote

But it’s important to remember that Microsoft succeeded in kicking up a lot of fuss about the CMA’s opposition being “bad for Britain” — throwing its weight around precisely like a domineering company that needs reining in. It would be a terrible outcome if the CMA was seen to be changing its mind under external pressure, rather than because the facts changed.

Another Source:

https://www.reuters.com/markets/deals/uks-cma-says-new-restructured-microsoft-activision-deal-could-require-new-probe-2023-07-12/

Quote

Jonathan Compton, partner at law firm DMH Stallard and a specialist in competition law, said it was difficult to see what structural alterations the company could make.

"Were it to do so, it could face fresh inquiry from the FTC and or the Commission," he said, of the U.S. and EU regulators.

Euclid's McGrath added: "how do you reset the clock just for the CMA process without resetting the clock everywhere?"

Britain's competition regulator has not given any further clarification on its U-turn or the new investigation, including whether it would fit into its Phase 1 and 2 process, the latter of which can take up to a year.

 

Edited July 12, 2023 by Choze

[Ashley]

On 11/07/2023 at 9:21 PM, Choze said:

Well the FTC have not agreed whatsoever but the Judge has sided wholly with MS on the preliminary injunction.

Sorry yes, the issue with checking these things on the go. 

In fact, the FTC has filed an appeal.

 

 

[Choze]

https://www.reuters.com/legal/us-appeals-court-refuses-ftc-request-pause-microsoft-deal-activision-2023-07-14/

And refused. It was nice to see the US regulators try.

The challenge made a difference and no doubt the loud responses from many giant companies (and their supporters) have been absolutely terrible.

 

[Dcubed]

2 hours ago, Choze said:

https://www.reuters.com/legal/us-appeals-court-refuses-ftc-request-pause-microsoft-deal-activision-2023-07-14/

And refused. It was nice to see the US regulators try.

The challenge made a difference and no doubt the loud responses from many giant companies (and their supporters) have been absolutely terrible.

 

It’s worth keeping in mind that literally every single publisher & platform holder has been publicly in favour of the deal… except for Sony.

Everyone in the industry benefits from this acquisition, with the sole exception of Sony.  Can’t say that I’d side with them on this one.