“I think the aggressive comments from Microsoft really are intended to get British lawmakers and the British people to be really aware that this body, that I think is attempting to do good, may actually do more to set the U.K. “Microsoft is dancing an incredibly delicate ballet,” Hindlian-Bowler said. She also said it made sense for Smith to call out the CMA, a relatively new body formed several years before Britain’s exit from the EU. Macquarie Group analyst Sarah Hindlian-Bowler said it will “be challenging, but possible” for Microsoft to complete its Activision takeover without the U.K.’s support. The regulator’s concern was over cloud gaming, or games streamed over the internet, which represents a tiny fraction of the industry today but where Microsoft, owner of the Xbox game system, already has the most powerful platform and would become more so with the Activision takeover, making it harder for other platforms to compete, Cardell said. is “absolutely open for business” and the regulator wants “to create an environment where a whole host of different companies can compete effectively, can grow and innovate.” “There is a lot of alignment there.”Ĭardell defended the decision, saying the U.K. “We’re not alone,” Sarah Cardell, chief executive of Britain’s Competition and Markets Authority, told BBC 4’s Today program of her agency’s decision and the pending FTC lawsuit. and is taking the company to trial in August. The company may end up with a more favorable ruling in Brussels, but Microsoft still has to contend with the FTC, which has challenged the deal in the U.S. Microsoft and Activision have vowed to appeal. Smith said that “people are shocked, people are disappointed” by the U.K. In his comments to the BBC, Smith said the “English Channel has never seemed wider” as he compared the United Kingdom unfavorably with regulators for the 27-nation European Union, who are due to make a decision on the Activision deal in May. “A number of jurisdictions are coming to realize that their effectiveness increases if they operate as a coalition,” Kovacic said. Not only that, but some of the dozens of nations with antitrust laws are increasingly talking with each other. Kovacic said the “halo effect” of pitching itself as a good partner with governments only goes so far if the regulator believes a deal could harm competition. Behind the heightened attention on technology companies is a belief that regulators were too weak over the past two decades in preventing monopolies. They’re seen as being more reasonable, thoughtful.”īut it’s not just Microsoft that has changed. ”They’re seen as being in a different category than the other well-known information technology giants. “That generated a great deal of goodwill for them around the world,” Kovacic said. “They’re struggling to maintain that ‘good guy’ reputation,” von Thun said.Īfter adopting a confrontational attitude toward regulators at the turn of the century, Microsoft’s senior leaders, led by Smith, have spent years crafting a friendlier and collaborative approach, said William Kovacic, former chair of the U.S. Now, it’s back, both as a powerhouse in sectors such as artificial intelligence and cloud computing and as a target for antitrust enforcement. It was eclipsed for a time by rivals like Google, Facebook and Amazon, which drew closer scrutiny from both Wall Street and regulators. After legal battles starting in the late 1990s, Microsoft came close to having to break up its business but ended up agreeing to concessions instead.
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