EU tech regulators dictate rules for US giants.

UK Regulator Blocks Microsoft’s Acquisition of Activision-Blizzard

The recent decision by the United Kingdom’s Competition and Markets Authority to block Microsoft’s $68.7 billion acquisition of Activision-Blizzard has put the sale on hold, illustrating how antitrust decisions in foreign nations can affect the economy of the United States. The combined company would have a monopoly over cloud gaming, which is why the UK regulator blocked the acquisition. While Microsoft is expected to appeal the decision, the repercussions of the decision, for now, reach worldwide.

Antitrust Enforcement in the US and Europe

The action also illustrates the move in the United States away from the “consumer welfare” standard that has underpinned antitrust enforcement for four decades and toward a model closer to that in use in the U.K. and European Union. There are two distinct approaches when it comes to the application of antitrust law. For the previous 40 years, under Republican and Democratic leaders, U.S. antitrust enforcers focused specifically on how deals affected the consumer. However, FTC Chairwoman Lina Khan has been challenging this interpretation since her appointment by President Joe Biden. Khan is considered a leader of the “hipster antitrust” movement, which looks beyond the consumer welfare standard and considers the effects of a given transaction on corporate concentration, income inequality, and other variables.

Shared Skepticism of Mergers

The shared skepticism of mergers between the U.S. and European regulators has led Khan’s critics to raise the fear that they are engaging in undue coordination. The U.S. Chamber of Commerce asked the White House in April to intervene against the FTC and the Department of Justice on the grounds that they were “preparing to help foreign governments implement protectionist policies that directly harm U.S. companies.”

Impact on Apple

The influence of European policy can be seen through how a company responds to two contrasting orders regarding from regulators there and in the U.S., Westling said, such as in the case of the E.U. decision earlier this year to force Apple to allow third-party app providers, or sideloading, through the Digital Markets Act. The decision would go contrary to the 2021 Epic v. Apple court decision, in which a federal judge in California ruled that the Big Tech platform was not maintaining a monopoly by keeping its App Store regulated. It is unclear if Apple will only allow sideloading in the E.U. or if it will do so in the United States, but Westling said that the E.U. decision would usurp the California one if it did.

Conclusion

It’s unclear how the U.K. block of the Microsoft acquisition will affect the FTC’s case against Microsoft. The two cases deal with two different aspects of the deal, even if they are related to the same deal. The impact of antitrust decisions in foreign nations on the U.S. economy is becoming increasingly apparent, and it remains to be seen how this will affect future mergers and acquisitions.