Europe has decided to drop its antitrust investigation into Microsoft and ABK’s proposed deal, after both companies agreed to make modifications to secure EU approval.
The European Commission (EC) had been concerned that the planned combination of Microsoft and ABK, one of the largest software companies in Europe, would lead to a “significant impediment of effective competition” within the EU.
The changes proposed by Microsoft and ABK, however, address the Commission’s concern by “allowing customers and competitors to continue enjoying the benefits of a competitive software market”, EC Commissioner Margrethe Vestager said.
The modifications to the deal include allowing competitors to access the Microsoft-ABK software; ensuring that customers can continue to freely use rivals’ programs; and ensuring that ABK does not unfairly benefit from Microsoft’s IP and digital sales channels.
The EC said that, following these changes, it now believes that the combination “no longer raises any competition concerns”.
The proposed deal between Microsoft and ABK was announced in June 2019, and had drawn the attention of European antitrust authorities. At the time, Microsoft CEO Satya Nadella said that the aim was to “accelerate the development of the intelligent cloud and intelligent edge”.
The agreement had originally been approved by a majority of the EC’s member states, but the competition authorities had referred the case to the European Court of Justice, concerned that it would “harm competition”.
The EC’s decision to drop the antitrust investigation is a victory for both Microsoft and ABK, who have both now signed binding commitments to the EC in order to ensure the deal does not harm competition.
Microsoft and ABK’s deal is expected to close in early 2020. It is a significant move for Microsoft, as it looks to expand its influence in the software market throughout Europe.
The EC’s decision to drop the antitrust investigation is likely to be welcomed by both companies, as they can now move forward with their plans without the specter of an investigation hanging over them.
