Two-minute Recap of Competition Law Matters Around the Globe – May 2023

Microsoft / Activision Blizzard Approved in the EU, Unlike in the UK

As noted in our previous recap, the UK’s Competition and Markets Authority (CMA) decided to block Microsoft’s USD 68.7 billion acquisition of US video game holding company Activision Blizzard based on concerns that Microsoft would be able to set its own rules for the cloud-gaming market, even with the proposed commitments.[1] The European Commission, however, found that Microsoft’s commitments eliminate the identified concerns adequately and approved the transaction.[2]

The ten-year commitments include the granting of free licenses to consumers and service providers in the EEA to allow consumers to stream, via any cloud game streaming service, all current and future Activision Blizzard PC and console games. The Commission further announced that Microsoft would have no incentive to refuse to distribute Activision's games to Sony, the leading distributor of console games, and even if that occurred, such an action would not significantly harm competition for console gaming, especially considering that “Call of Duty” (one of Activision Blizzard’s games) is less popular in the EEA compared to the rest of the world.

Correspondingly, given its market power, Sony would still be able to exert competitive pressure against Activision Blizzard even if it were unable to offer this specific game. Nonetheless, this saga continues, with the parties’ appeal against the CMA’s decision and the US Federal Trade Commission’s suit to block the deal.

German Sector Inquiry Discusses Structural Remedies to Google’s Online Advertising Business

Germany’s federal competition watchdog, the Bundeskartellamt, published its final sector inquiry report regarding the online advertising market.

The report underlines Google’s clearly prominent role in the sector and highlights the Bundeskartellamt’s main concerns—the use of consumer data obtained through other Google services, and complaints that advertisers are unable to assess whether or not their ads are effective.

While the report does not include any direct proposals in the report, it does discuss recommendations such as ordering Google to divest its Chrome search engine, unbundling its Adtech stack, or forcing the company to give third parties access to its datasets.

No-poach Agreement Fined in Peru

Peru’s consumer protection authority, Indecopi, fined six construction companies and four executives a total of EUR 1.4 million over their no-poach agreement executed between 2011 and 2017.

The authority found that the companies colluded together to not transfer construction workers and administrative personnel. It should be noted that while the decision was issued in May, five of the investigated companies and three of the executives settled with Indecopi last year to receive reduced fines.

Transaction of Slovenia’s Second and Third-Largest Fuel Suppliers Cleared by the Commission

Following its in-depth investigation, the European Commission has approved oil and gas supplier MOL’s EUR 301 million acquisition of OMV’s Slovenian subsidiary, subject to the condition that MOL divests 39 stations to Shell Group.

The authority noted that after the deal, the only significant competitor remaining would be state-owned Petrol, which would increase the likelihood of coordination between the two remaining companies, as there would be no major competitor left in the field. However, with the divestment of stations, the Commission finds that Shell may also provide competitive constraints that address their concerns. 

EU Court Orders Meta to Comply With the Commission’s Information Requests

The EU’s General Court rejected Meta’s bid to stop the European Commission from gaining access to thousands of documents as part of its investigation into the company’s data practices and classified ad services.

While the Commission initially requested that the documents be handed over and imposed an EUR 8 million daily penalty for failing to comply, Meta filed a motion to have this decision annulled, as the data to be submitted includes personal data of its employees. In October 2022, the General Court decided that the documents need to be provided but also imposed interim measures, including that the Commission will review the documents containing sensitive information in the presence of Meta’s lawyers, and that the documents will be placed in a virtual data room and access will be restricted.

In its most recent decision, the General Court dismissed Meta’s arguments and stated that the request does not go beyond what is necessary for the investigation.

Sony Investigated in Romania Over Playstation Store Exclusivity Practices

Romania’s Competition Council launched an investigation into Sony’s possible abuse of dominance, based on allegations that competing distributors are not allowed to sell activation codes for PlayStation-compatible games, and as such, publishers are forced to sell via the PlayStation Store.

Sony allowed users to purchase download codes from third parties until 2019, but since then all games are required to be purchased from the PlayStation Store.

[1] https://www.gov.uk/government/news/microsoft-activision-deal-prevented-to-protect-innovation-and-choice-in-cloud-gaming

[2] https://ec.europa.eu/commission/presscorner/detail/en/ip_23_2705

Tagged with: Gen & Temizer | Özer, Bulut Girgin, Simru Tayfun, Orçun Horozoğlu, Competition