The UK's Competition and Markets Authority (CMA) has announced plans to revamp its merger assessment regime following criticism over its handling of the Microsoft-Activision Blizzard deal. The CMA, which gained more authority after Britain's exit from the EU, will implement changes to improve interaction with involved parties and allow remedies to be proposed earlier in the process.
The CMA faced backlash for initially blocking Microsoft's $69 billion acquisition of Activision Blizzard, only to later reopen and approve the deal after the tech giant made modifications. The companies involved expressed surprise at the initial block, claiming the full extent of the CMA's objections was unclear.
CMA Chief Executive Sarah Cardell emphasized that there was no political intervention in the decision-making process and aimed to dispel speculation to the contrary. She stated that the CMA is an organization that listens, learns, and evolves its processes to ensure effective merger control.
Under the proposed changes, merging parties will have an opportunity to make representations after seeing the case against them in an interim report published earlier in the process. This adjustment is intended to allow more time for parties to submit their views and engage in a more discursive approach.
Further, Martin Coleman, who chaired the Microsoft panel, highlighted that Microsoft President Brad Smith had acknowledged his company's accountability in the process and suggested that Microsoft should have found a way to address concerns sooner.
The new process will enable merging parties to discuss remedies with the CMA at an early stage. The regulator reviews deals in two stages, assessing potential competition reduction in the initial phase and examining remedies, including potential block or divestments, in the second phase.
Cardell clarified that the decision to reopen the Microsoft case did not signify the introduction of a new third phase. She emphasized the CMA's strong preference for structural remedies and noted that the success of the changes depends on merging parties engaging in good faith.
The overhaul comes as part of the CMA's commitment to refining its processes to ensure effectiveness in handling mergers and responding to concerns raised during the Microsoft-Activision Blizzard case. The regulator aims to strike a balance between robust scrutiny and fair, transparent decision-making in its role as a prominent global antitrust authority.