Two-Minute Recap of Competition Law Matters Around the Globe – April 2023

Game Over for Microsoft? Microsoft / Activision Blizzard Blocked in the UK

The UK’s Competition and Markets Authority (CMA) announced that it has blocked Microsoft’s USD 68.7 billion acquisition of US video game holding company Activision Blizzard.[1] Considering that Microsoft already owns the streaming video game service Xbox, the most widely used PC operating system (Windows), and a worldwide cloud computing infrastructure (Azure and Xbox Cloud Gaming), which together account for an estimated 60%–70% of global cloud gaming services, the CMA found that this transaction would strengthen Microsoft’s market power.

Even though Microsoft proposed behavioural remedies such as licensing specific Activision games to its competitors, the CMA stated that Microsoft’s proposition was inadequate since “it did not sufficiently cover different cloud gaming service business models, including multigame subscription services” and underlined that “there are significant risks of disagreement and conflict between Microsoft and cloud gaming service providers, particularly over a ten-year period in a rapidly changing market”. Microsoft is expected to appeal the case to the UK Competition Appeals Tribunal to reverse the decision. While the competition authorities of South Africa, Saudi Arabia, Brazil, Serbia, Chile, and Japan have already cleared the deal, all eyes are now on the US Federal Trade Commission and the European Commission. For more information about competition law assessments in the gaming industry, please find our article from September 2022 here.

 

Lukoil fined in Bulgaria for the second time in two months

Following the approximately EUR 33 million fine imposed on Lukoil by Bulgaria’s Commission for the Protection of Competition for margin squeeze in the wholesale market for motor fuels, the Lukoil Group was fined again in Bulgaria for abusing its dominant position by limiting access to tax warehouses and transport infrastructure, which can reduce the import of fuels into the country.

 

Competition in labour markets continues to remain a hot topic

The UK’s CMA has included the BBC in its probe into whether sports broadcasters such as ITV, BT and Sky fixed the pay for freelance workers. Furthermore, in the United States, the Department of Justice lost another attempt to criminalise “no-poach” and “wage-fixing” agreements. In the most recent case, which concerns six aerospace employees, the court ruled that the alleged “no-poach” conduct was “not a market allocation agreement as a matter of law.”

 

Korea’s Supreme Court confirms Qualcomm’s abuse of dominance fine

The top court in Korea upheld the record EUR 713 million fine imposed on US communications company Qualcomm for violating the binding commitment to license its standard essential patents on FRAND (fair, reasonable and non-discriminatory) terms.

 

Disney might be fined in Chile

Chile’s National Economic Prosecutor’s Office (FNE) has asked the Tribunal for the Defence of Free Competition (TDLC) to impose a fine of EUR 3.3 million on Disney for failing to disclose relevant market-related studies while Disney’s acquisition of 21st Century Fox was being reviewed. The USD 71.3 billion deal was approved on conditions such as not tying 21st Century Fox channels to Disney channels and not bundling sports content. After investigating whether the conditions are complied with, the FNE stated that it found at least 30 market-related studies, reports and other informative documents even though Disney only provided two such documents at the time and such conduct violates the requirement to submit all documents containing information on relevant markets.

 

European Commission surprises Gucci with a dawn raid

In an effort to revitalise cartel enforcement, the European Commission has been conducting more dawn raids since 2021 than previously. Continuing this trend, the Commission raided the offices of several fashion companies and sent them requests for information. While the other investigated undertakings are not known as of now, Gucci’s parent company Kering confirmed that their office in Milan was searched within the scope of the investigation.

 

 

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