Through its market investigation, the EC found that the acquisition by Microsoft will not considerably reduce competition in the transcription software, enterprise communication services, cloud services, productivity software, customer relationship management, and PC operating systems markets
Microsoft secures EC approval for acquisition of Nuance Communications. (Credit: Coolcaesar/Wikipedia.org)
The European Commission (EC) has unconditionally approved Microsoft’s $19.7bn acquisition of US-based conversational artificial intelligence (AI) firm Nuance Communications.
According to the European Union (EU) regulator, the acquisition by Microsoft would not result in any competition concerns in the European Economic Area (EEA).
Announced in April 2021, the deal will see Microsoft acquire the AI firm for $56 per share in cash, inclusive of the latter’s net debt.
The EC noted that Nuance Communications is active in providing transcription software with a particular focus on the healthcare sector and customer engagement solutions.
Through its market investigation, the regulator found that the deal will not considerably bring down the competition in the transcription software, enterprise communication services, cloud services, productivity software, customer relationship management, and PC operating systems markets.
The Commission said that it studied the horizontal overlaps between the operations of Microsoft and Nuance Communications in the markets for transcription software. It found that the two companies have very different products to offer.
The regulator noted that Nuance Communications provides end-users mostly with out-of-the-box solutions, while Microsoft offers application programming interfaces (APIs) under its Azure Cognitive Services which are used by developers for the integration of speech recognition technology into their programmes.
The Commission concluded that the combination of the two firms will continue to have stiff competition from other players.
As per its investigation, competing transcription service providers in healthcare have been found to have no dependency on Microsoft for cloud computing services. Also, transcription service providers in the healthcare sector are particularly not the major users of cloud computing services, said the regulator.
The EC also examined the conglomerate links between Nuance Communications’ transcription software products and various Microsoft’s products. Apart from that, the use of data transcribed with the AI firm’s software was reviewed.
For both cases, the Commission ruled that the deal will not have an impact on competition.
The deal had secured approval in the US in June 2021. Earlier this month, the UK Competition and Markets Authority (CMA) launched its probe into the deal.