Britain’s antitrust regulator will overhaul its merger assessment regime, including improving interaction with the parties and letting remedies be pitched sooner, after it was criticised over the Microsoft-Activision Blizzard deal.
The Competition and Markets Authority (CMA) moved into the top tier of global regulators when Britain left the European Union in 2020, giving it a bigger say over mega-mergers such as Microsoft’s $69 billion acquisition of the “Call of Duty” maker.
It blocked that deal, to the fury of the two U.S. companies, but then tore up its own rule book to reopen and then approve the case after Microsoft came back with changes.
The companies were surprised by the block, saying the full extent of the CMA’s objections had not been made clear to them.
Microsoft lobbied the British government, including finance minister Jeremy Hunt, to try 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 influenced the eventual outcome.
“There was no attempt by any politician or political adviser, or government official to influence our decision making,” she said on Monday.
But she said in a statement that the CMA was an organisation that “listens and learns”, both in the course of its investigations and in how it evolves its processes to ensure that its merger control operated as effectively as possible.
Martin Coleman, who chaired the Microsoft panel, noted that Microsoft president Brad Smith had recently said his company should accept a level of accountability for the process, and Microsoft should have figured it out how to unlock it sooner.
Coleman said under the new proposals, the merging parties would have an opportunity to make representations after seeing the case against them in an interim report that will be published earlier in the process.
The hearing would “allow more time for the parties to make submissions and for the adoption of a more discursive approach,” he said.
“Throughout the process it will be open to merger parties to discuss remedies with the group at an early stage if they so wish.”
The CMA reviews deals in two stages: an initial phase to decide if it could reduce competition, and a second phase to examine remedies, including an outright block or divestments.
Cardell, who was appointed head of the regulator nearly a year ago, said the unusual step to reopen the Microsoft case did not signal the existence of a new third phase.
“There’s no benefit from holding back” in offering remedies, she said.
She added that the agency’s strong preference for structural remedies remained, and added that the changes would only succeed if merging parties engaged in good faith.