Britain proposes antitrust overhaul after Microsoft-Activision case

Britain’s antitrust regulator will overhaul its merger review regime, including by improving interaction with the parties and speeding up resolutions, after criticism was raised over the deal between Microsoft and Activision Blizzard.

The Competition and Markets Authority (CMA) moved to the top of global regulators when Britain left the European Union in 2020, giving the country a bigger voice on mega-mergers such as Microsoft’s acquisition of the maker of “Call of Duty worth $69 billion.

It blocked that deal, to the fury of the two US companies, but then tore up its own rulebook to reopen and then approve the case after Microsoft came back with changes.

The companies were surprised by the blockade and said the full extent of the CMA’s objections had not been made clear to them.

Microsoft lobbied the British government, including Chancellor of the Exchequer Jeremy Hunt, to get the deal back on track.

CMA chief executive Sarah Cardell said she wanted to put to rest once and for all speculation that political intervention would influence the final outcome.

“There has been no attempt by any politician, political advisor or government official to influence our decision-making,” she said on Monday.

But she said in a statement that the CMA is an organization that “listens and learns”, both in the course of its investigations and in the way it develops its processes to ensure its merger control functions as effectively as possible.

Martin Coleman, chairman of the Microsoft panel, noted that Microsoft President Brad Smith had recently said his company had to accept some degree of responsibility for the process, and that Microsoft should have figured out how to unlock it sooner.

Coleman said under the new proposals the merging parties would be given the opportunity to make submissions after seeing the case against them in an interim report to be published earlier in the process.

The hearing would “give the parties more time to submit submissions and for the adoption of a more discursive approach,” he said.

“Throughout the entire process, it is open to merger parties to discuss solutions with the group at an early stage if they wish.”

The CMA assesses deals in two phases: a first phase to decide whether it can reduce competition, and a second phase to explore solutions including an outright blockade or divestments.

Cardell, who was appointed head of the regulator almost a year ago, said the unusual move to reopen the Microsoft case did not indicate the existence of a new third phase.

“There’s no point in holding back” in offering remedies, she said.

She added that the agency’s strong preference for structural solutions remained, adding that the changes would only succeed if the merging parties acted in good faith.

The CMA consultation closes on January 8.