By using this site, you agree to our Privacy Policy and our Terms of Use. Close
EpicRandy on 11 May 2023
Edit Thread
Machiavellian said:
EpicRandy said:

They can't block the deals outside of their own border but they can shut MS down from doing business within their border and they can put whatever condition with worldwide implications they want on MS to do business in the UK. The CMA's global stance is not that they want to act as a regulator for all countries but they want the remedies for their findings to not simply be addressed by specific carve out for the UK market.

However, if the condition required by the CMA is judged non-standing within the UK it'll for sure be quashed in appeal. Though In this case, the CMA can argue that even if MS were to leave the cloud gaming market in the UK specifically, their capacities will allow them to still cause an SLC for that market within the UK border.

I know that the UK can block the deal, I am saying that how can they block the deal because of something that does not exist in their boarder.  That would setup a war of attrition where each country can basically do the same and thus when a large UK company wants to purchase a company, in retaliation another country can impose world wide conditions to block the deal.  Also, I would believe that the CMA would need to prove that if cloud services outside of UK boarders has a effect on their own market with this particular deal.  Its one thing to make claims, its another to provide concrete proof which I would expect to be the bar if it goes to CAT.  Like I stated, I have no real clue how UK courts work but if that is not the bar than yeah, the CMA has way to much power and the domino effect may not be what they are looking for.

The second step that MS can do is just comply with all the conditions the CMA stated was lacking in their agreements.  The other thing I wonder but not sure is could MS just leave the console business in the UK.  I know the UK is a sizeable chunk of MS console business but it would be interesting if MS value this deal more than the UK market.  Not sure if that works but MS has expand to more regions then they have before and thus could see making up the difference.

Well yeah, it's a bit of a grey zone I think, like I said the CMA may argue the market is still impacted, but that doesn't mean they will or that this argument would not be greatly diminished as a result. MS can try and maybe they will succeed there, but I think that in this scenario the CMA will impose sanctions and fines on MS, and the burden to prove this remedy sufficiently addresses the CMA conclusion would be on MS's shoulders again. Also, MS would run the risk of being forced to divest Activision as a result which would shut down the possibility of simply leaving the cloud market worldwide to close the deals.

Leaving the UK for their console business as a whole is overkill and also would not address CMA cloud SLC anymore than carving out Xcloud out of the UK so it's a no-go.

Compared to this, and as highlighted in another post of mine, simply leaving the cloud market worldwide would definitely solve CMA concerns and they'd be 100% free to close the deals. Then they could re-enter the market in 4-5 years saying CMA then concerns don't apply anymore. I think it's only in this scenario that the uphill battle will be on CMA's side would they still want to fight MS.