UK merger control post Microsoft/Activision: Phase 3, behavioural remedies, and the beginning of the end of the panel?

Abstract

This article critically examines the procedure adopted by the Competition and Markets Authority in its review of Microsoft’s anticipation acquisition of Activision, which concluded on 13 October 2023, and what it might tell us about the next decade of CMA merger enforcement. It explores how the notion of ‘material change of circumstances’ was successfully deployed by the parties to overturn the CMA’s initial prohibition decision and how this ‘second bite of the cherry’, or ‘Phase 3’ might be utilized in future cases. It explains how, unlike the cases that came before it, Microsoft/Activision forced the CMA to overturn its Final Report and accept a negotiated settlement in place of defending the prohibition decision in the CAT, sidelining the Panel. It considers whether the case has set a precedent (however exceptional) for the CMA to accept re-notification of substantially the same merger after an initial prohibition decision, and whether fix-it-first (or ‘fix it last’) behavioural remedies may now find even more favour, including once the CMA’s Digital Markets Unit joins the show. It concludes with an examination of how the CMA’s approach in this case, coupled with its proposed reforms to the Phase 2 process, may presage the beginning of the end of the CMA’s panel system in UK merger review.