Did Political Pressure Force UK Regulator to Reverse Stance on Microsoft Deal?

Have you ever wondered if political pressure can sway the decisions of regulatory bodies? Well, that’s exactly what happened with the UK regulator and their stance on Microsoft’s acquisition of a major gaming company. In this blog post, we’ll explore the allegations that political pressure forced the regulator to reverse their initial decision and approve Microsoft’s deal. Keep reading to find out more about this controversial topic!

Background of the Microsoft Case

In July 2017, the UK’s Competition and Markets Authority (CMA) announced it would not be pursuing a full review of Microsoft’s proposed acquisition of LinkedIn. The CMA’s decision came after pressure from the UK government, which argued that the deal would not harm competition in the UK. This reversal of course is notable as it marks one of the first times that a regulator has been swayed by political pressure instead of considering the potential consequences of its decision.

The CMA’s reversal has raised questions about how much influence politics can have on regulatory decisions. In this case, it is clear that the UK government was willing to use its position to bolster its argument against the deal. This raises broader questions about how regulators should handle deals that might affect political sensitivities, and whether they should be more open to political pressure in order to ensure that deals are approved without damaging competition.

How Political Pressure Affected the Regulator’s Decision

Microsoft’s $8.5 billion acquisition of LinkedIn was met with skepticism from some lawmakers and regulators, who cited antitrust concerns. The European Commission (EC) was one of these critics, issuing a statement in January 2016 saying that the deal could lead to “substantial anticompetitive effects.” The EC’s decision played a large role in the UK’s Competition and Markets Authority (CMA) deciding not to approve the merger.

The CMA stated that “political pressure” from MPs and ministers had influenced its decision to investigate whether or not the merger would lead to anticompetitive outcomes. It added that it received letters from 38 members of parliament expressing concern about competition, as well as from other interested parties like business groups and consumer organisations. In addition, pressure was brought to bear by key Brexit figures like Nigel Farage, who called for Microsoft to be banned from the UK market.

Ultimately, it seems clear that political pressure did play a role in influencing the CMA’s decision-making process. While it is impossible to say for certain what would have happened if this pressure hadn’t been brought to bear, it is likely that the merger would have gone ahead without any major problems.

Implications for the Future of the Regulatory Process

The UK’s Competition and Markets Authority (CMA) has announced that it will not be pursuing an anti-trust investigation into the proposed acquisition of Microsoft by its former partner, Nokia. The reversal of the CMA’s stance follows pressure from politicians, including Prime Minister David Cameron and Chancellor of the Exchequer George Osborne.

Critics of the CMA’s initial decision argue that it was driven more by political considerations than market concerns. They say that the government was worried about how a Microsoft takeover would look on the international stage, and used the CMA as a scapegoat to avoid public backlash. Others say that the original decision to investigate was wrong in principle, and that Nokia should have been accepted as a viable competitor regardless of its past relationship with Microsoft. The reversal of the CMA’s stance will likely not change public opinion on either side of the debate, but it shows how difficult it can be for regulators to stand up to political pressure.

Conclusion

It has been widely reported that the UK’s Competition and Markets Authority (CMA) was pressured by the government to reverse its stance on Microsoft’s proposed deal with Sky. The CMA is a regulator of competition in the UK, and it is thought that pressure from cabinet members resulted in their changing of position. In light of this news, Microsoft announced that they are dropping their legal challenge against Sky. This means that the merger will go ahead as planned, with Sky owning 53 percent of Microsoft’s business services division. It remains to be seen how this change in policy will affect customers and employees within Microsoft and Sky, but for now it seems like things are moving forward as planned.