The European Union’s top antitrust enforcer warned against the risk of global regulators clamoring to be the first to pronounce on mega deals such as Microsoft Corp.’s $69 billion plan to buy Activision Blizzard Inc. and said it’s possible they’ll reach different conclusions on mergers.
(Bloomberg) — The European Union’s top antitrust enforcer warned against the risk of global regulators clamoring to be the first to pronounce on mega deals such as Microsoft Corp.’s $69 billion plan to buy Activision Blizzard Inc. and said it’s possible they’ll reach different conclusions on mergers.
“I think that’s a very important discussion because we cannot be in a race,” European Commission Executive Vice-President Margrethe Vestager said in an interview with Bloomberg Television’s Guy Johnson in Luxembourg on Tuesday. “We need to serve the specific markets where we have jurisdiction.”
“The UK system is different, the US system is different again,” she said. “So even when we look at the same transaction with different markets and different legal provisions, sometimes we’ll get to different results.”
Her comments come as global deals are facing intense scrutiny from competition watchdogs in the EU, US and UK, which is playing a bigger role after Brexit. For Microsoft, Britain’s Competition and Markets Authority could present possibly the biggest hurdle yet, after the agency earlier this month suggested a number of structural remedies, including the divestiture of the business associated with Call of Duty, the Activision part of the business or blocking the merger altogether. The filing came before decisions from the EU and the US Federal Trade Commission, which is locked in a lengthy legal process after formally suing to veto the transaction.
Microsoft President Brad Smith told reporters after a closed-door hearing with the EU commission in Brussels last week that it isn’t “feasible or realistic to think that one game or one slice of this company can be carved out and separated from the rest” as part of the acquisition. Antitrust regulators have a choice, he said: Block the deal or “let the future go forward with behavioral guardrails and remedies and bring this title to 150 million more people.”
Microsoft Paints ‘Call of Duty’ Sale as Activision Dealbreaker
Broadcom Inc.’s proposed $61 billion takeover of cloud-computing company VMware Inc. is another big deal that’s in the middle of an extended EU review, after the commission warned it could lead to “higher prices, lower quality and less innovation” for business customers. The UK’s CMA kicked off a first stage merger inquiry into the chipmaker’s purchase of the cloud computing firm last month.
Vestager said that for merger reviews Europe has “the highest bar” with the most “heavyweight legal obligations.” Any decisions taken “will have to stand up for very tight scrutiny in court,” she said.
Speaking about her scrutiny of the Microsoft-Activision deal, Vestager said on Tuesday she’s not a gamer herself, that she prefers Sudoku instead.
“I’m not there to sense the passion. I’m there to sense the fact of the case,” she said. “I try to get the full picture because we should not be captured by any side of, of the debate about the effects of emerging.”
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.