Senior CMA director who blocked Microsoft's Xbox-Activision merger previously worked for Sony law firm

What you need to know

  • The UK regulator, known as CMA, sensationally blocked the merger of Activision-Blizzard with Xbox.
  • Activision is known for World of Warcraft, Candy Crush and Call of Duty, and the deal has been opposed by Sony, Google, among others.
  • Despite protests from some of Microsoft's biggest competitors, the vast majority of the gaming industry backed the deal, as Microsoft wants to add its games to competitors' cloud services.
  • Today, a prominent patent lawyer who has been following the case discovered that the senior director of the UK regulator works for a company actively representing Sony, which could highlight a conflict of interest and degradation of impartiality.

Some time ago, the UK competition and mergers regulator, known as the CMA, sensationally blocked Microsoft's merger between Xbox and Activision. With Xbox in a distant third place in the console race, the merger would have helped Microsoft gain a stronger footing to ensure its ability to compete long-term in an industry that is increasingly shifting towards mobile games and services – a landscape dominated by Apple, Google, and Chinese companies such as Tencent. Fueling unfounded fears that Microsoft might block Call of Duty on PlayStation, despite offering contractual obligations to deliver it, Sony successfully challenged the acquisition in several key markets, including the UK.

The UK's CMA is well known for its incompetence and ignorance when it comes to technological deals, as Apple and other companies have previously defeated it for its excessive claims. Many decisions made by the CMA in the past have clearly harmed investment in the UK market, potentially reducing innovation and employment in a region desperately in need of it. The CMA has been criticized by the European Commission and the UK government itself in recent weeks for its strange and irrational decision to block Xbox's deal for Activision, on 'fears' that it could damage the 'cloud market', a measurement that barely exists. And now another interesting piece of the "irrational" pie may have been uncovered.

Patent lawyer Florian Meuller @FOSSPatents recently discovered that the current senior director of CMA, Colin Raftery, previously worked for Cleary Gottlieb, a law firm that represented Sony in its regulatory protests against the deal.

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Raftery speaks at an event where high-profile personalities debate post-Brexit regulatory issues. It is said that another speaker at the event represents law firm RBB, which also represents Sony and Google in major lawsuits against Microsoft's acquisition.

Raftery has not worked for Cleary for some time, but it is not far-fetched to think that there could be a conflict of interest here. If Raftery has personal relationships with old acquaintances and friends who would benefit from stopping the ABK deal, that could clearly indicate bias.

The UK is widely known for having a culture of political scratching, particularly when it comes to insider trading within the political class. The current ruling party has repeatedly been accused of using its position to offer lucrative, taxpayer-funded booming contracts to friends and friends of friends, particularly during the pandemic.

Even the possibility of foul play here underscores the need for greater oversight of CMA's regulatory operations. The decision to block Microsoft's deal on the argument that it is the 'largest' cloud operator, the argument that all Xbox Game Pass Ultimate subscribers can use the cloud, is irrational in itself. It also omits the fact that Amazon Luna with Amazon Prime launched just days after the CMA filed its final decision. According to the CMA's own logic, Amazon Luna now becomes the UK's largest cloud gaming provider thanks to an estimated 13 million Amazon Prime account holders in the UK market.

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