Microsoft’s acquisition of the conversational AI firm, which was announced in April 2021, was previously approved by the US Department of Justice, the Australian Competition Commission, and the European Commission
Headquarters of Nuance Communications in Burlington, Massachusetts. (Credit: Nuance Communications, Inc.)
The UK Competition and Markets Authority (CMA) has given its clearance to Microsoft’s previously announced $19.7bn acquisition of Nuance Communications, a US-based conversational artificial intelligence (AI) firm.
The regulator ruled that the deal does not lead to a realistic prospect of a significant reduction of competition in any market in the UK.
Announced in April 2021, the deal came under a phase 1 investigation by the British competition watchdog.
The phase 1 probe was launched in December 2021 to study if the acquisition will result in lessening of competition within any market or markets in the UK for goods or services.
Nuance Communications mainly provides voice recognition and transcription software. It has two main business divisions, which are healthcare and enterprise.
According to the CMA, Microsoft and Nuance Communications have a combined share of over 25% in the supply of software that enables users with accessibility requirements in commanding and controlling their personal computer and its applications using their voice (C&C software).
However, the regulator found that the two parties are not close rivals in the supply of C&C software. Especially, the CMA found that Microsoft competes mainly against other OS providers, and not against Nuance Communications.
Furthermore, the majority of third parties with whom the CMA engaged, did not see the two firms as close competitors.
The British regulator also found that the two firms do not closely compete in the supply of healthcare transcription software. The competition regulator said that it particularly considers that the functionality of general purpose transcription is not a close rival to healthcare-specific transcription software.
The competition watchdog stated: “Based on the available evidence, the CMA does not believe that the Merged Entity would have the ability to foreclose Microsoft’s rivals.
“In particular, the CMA considers that the Merged Entity would not be able to foreclose rivals by bundling patient administration tools, patient engagement tools, or remote healthcare tools with healthcare transcription software.”
In late 2021, the deal was approved by the European Commission, which followed approval from the Australian Competition Commission in October 2021, and clearance from the US Department of Justice in June 2021.