From the lawyer covering the topic…
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Next important dates (April is going to be busy):
- Early February 2023 (between 8th and 10th, probably): provisional findings and remedies (if required) from the CMA.
- April 11th 2023: final decision from the EC.
- April 12th 2023: motion for a preliminary injunction on the gamers' lawsuit.
- April 18th 2023: second extension of the original outside date. If MS quits by that date they have to pay a termination fee of $2,500,000,000; if they don’t, the outside date gets extended until July 18th 2023.
- April 26th 2023: final report and remedies (if required) from the CMA.
- April 28th 2023: decision from New Zealand.
- April - May 2023: decision from the SAMR in China.
- July 18th 2023: The end of the second extension and final outside date in the merger agreement. If MS quits by that date they have to pay a termination fee of $3,000,000,000; if they don’t, they’ll have to renegotiate the outside date with ABK.
- August 2nd 2023: beginning of the FTC in-house trial.
- Early 2024: decision from the FTC administrative law judge.
- Anything beyond that: unknown
On the other hand, let's set expectations for next week
- The provisional findings (PF) from the CMA is a document that essentially works like a draft decision. It must be followed by the final report.
- The PF will be published (in non-confidential form) on the CMA's website. Expect at least 60 - 80 pages, although I think that this case is more likely to be between 120 - 170 pages. There are PF that go beyond 400 pages :S
- Although it may happen, normally there are no changes between the PF and the final report regarding statutory questions and the "gist" of the case. That's why the PF are so relevant. If there is a change, the CMA has to publish on its website and disclose to all the relevant parties its reasons for changing its PF in order to provide the parties with an opportunity to comment prior to the publication of the final report.
- The PF will create three main scenarios:
A) The deal gets blocked: MS, ABK and third parties will have at least 21 days to comment on the PF. A notice of possible remedies will also be published because prohibition is a remedy to address a substantial lessening of competition. Once all responses have been considered, the CMA will finalise its report and announce its decision.
If this happens, I think that deal will be very likely done, but expect more developments at least until the end of April (responses to the PF from MS, ABK and third parties, final report and more).
B) The deal gets approved without remedies: MS, ABK and third parties will have at least 21 days to comment on the PF. A notice of possible remedies won't be published in this case because there is no substantial lessening of competition. Once all responses to the PF have been considered, the CMA will finalise its report and announce its decision.
If this happens, I think that deal it's very likely to go through, but expect more developments until the end of April (responses to the PF from third parties, final report and more). Then in May, June and July, decisions from the rest of jurisdictions. And in August, maybe the FTC trial (if MS hasn't closed the deal before that).
C) The deal is anticompetitive but can be fixed through remedies: MS, ABK and third parties will have at least 21 days to comment on the PF. A notice of possible remedies will also be published, where the CMA will initially propose remedies to address any competition concerns. MS, ABK and third parties will have at least 7 days (normally 14) to comment on the remedies notice. Once all responses have been considered, including a remedies working paper where the parties and the CMA will have been discussing options for remedies, the CMA will finalise its report and announce its decision (including the remedies that may have been adopted).
This is the most complex and uncertain scenario because depending on the remedies proposed and the ones that MS/ABK are willing to accept, the deal could go through or being abandoned.
The CMA is unlikely to accept behavioural remedies, but more likely to accept structural remedies.
In any case, if this happens and the parties and the CMA agree on a remedy package, expect more developments until the end of April (responses to the PF from third parties, MS and ABK, responses to the remedies notice from MS, ABK and third parties, final report and more). Then, the CMA has 12 extra weeks following publication of its final report to negotiate and finalise remedies or order them. So, this would go on at leat until the end of July 2023.
Therefore,
the provisional findings from the CMA are going to be a huge step forward for this case and will unblock lots of other review processes happening in different jurisdictions, but it won't be the end.
I mean, even if this gets blocked, we are going to be here at least until the end of April.
Get ready and have fun!