UK CMA turns to AI and mobile browsers after approving HPE/juniper deal

The Competition and Markets Authority (CMA) also revealed on Thursday that it is having a look at Amazon's partnership with AI start-up Anthropic – there's a big question mark over all the hyperscalers' involvement in the AI space from a competition perspective – and separately suggested a series of potential remedies to address competition issues in the mobile browser and cloud gaming sectors.

There's not a lot to go on with regard to the HPE/Juniper Networks case at this stage. The CMA simply announced that it has cleared the proposed acquisition and pledged to publish its decision in full shortly. But it has yet to actually do that.

It's safe to surmise that the CMA sees no real threat to competition in the UK as a result of the merger, approving the deal as it did without the need for a phase two investigation and in short order. In this respect it echoed the EU's decision on the matter.

The CMA launch its phase one investigation into the transaction as recently as late June, some six months after HPE revealed it had brokered a US$14 billion deal to pick up rival Juniper Networks.

There is some overlap between the two businesses in networking and security, and a bulked-up HPE will certainly have more clout to take on Cisco in the former. And Juniper Networks also brings HPE additional assets in the increasingly important AI space via its Mist business, which was a large part of the company's rationale for the eye-wateringly-priced acquisition in the first place.

But with HPE not being an existing big gun in networking, none of the crossovers are proving enough to phase the regulators. The CMA's approval of the deal comes just days after the European Commission gave it the thumbs-up, also in very quick time. Both decisions will help HPE in its quest to close the deal at the back end of this year or early next.

And in the UK the CMA can now turn its attention to other potential competitive threats in the broader tech market.

Its probe into the mobile browser and cloud gaming space has been a much longer affair. As long ago as June 2022, after around a year of information-gathering, it declared that Google and Apple effectively hold a duopoly in mobile ecosystems and launched a consultation into the market position of both in the mobile browser space and into Apple's restrictions on cloud gaming through its App Store. It formally opened a phase two investigation later that year.

The process has been drawn-out in part due to a legal challenge from Apple which the CMA ultimately won, affirming its right to investigate. There have been many developments along way, the latest being the publication of a working paper in which the CMA suggests potential competition remedies and of a the results of a consumer survey carried out by Verian, which was still known as Kantar when the report was commissioned in February last year.

The Verian report looks at consumer behaviour and confidence with regard to using and installing mobile browsers, and will inform the CMA's ultimate ruling in the case. It's a fairly lengthy tome, but can be downloaded here for anyone who fancies giving it a read.

The remedies paper (here) is arguably more interesting, in that it outlines a series of commitments the CMA is considering imposing on Google and Apple. For the most part, they are about ensuring Google and Apple remove restrictions on the functionality of browsers other than their own and improving consumers' ability to choose their own browser.

The key element here is that this probe appears to be coming fairly close to fruition; we could finally have a decision, and then action, from the CMA in the not-too-distant future.

Industry-watchers are doubtless hoping that the watchdog's new investigation will not take as long, but then again, it is a fairly complex affair.

Also on Thursday the CMA announced the launch of an investigation into Amazon's partnership with Anthropic. Amazon completed a US$4 billion investment in Anthropic, a US-based outfit that specialises in ethical AI development, in March, a move that raised warning flags over its potential impact on competition. The competition has now decided to investigate and has until 4 October to decide whether to open a phase two probe.

This is not just about Amazon though. The CMA opened a similar investigation into Alphabet's relationship with Anthropic last week; Google's parent company is ploughing $2 billion into the start-up. And it is also looking at Microsoft's partnership with Mistral AI.

There will be a lot of threads to weave together in these AI market investigations. But at least the CMA has the HPE/Juniper deal off its 'to do' list now.