The UK’s competition regulator is investigating Microsoft’s $16 billion acquisition of speech recognition firm Nuance.
The CMA, or Competition and Markets Authority, said it is launching the probe to establish if the deal will ‘result in a substantial lessening of competition within any market or markets in the UK for goods or services.’
Nuance is best known for providing the original speech recognition system behind Siri, Apple’s virtual assistant. Its conversational transcription software is widely used in the NHS to cut down on note taking and became more crucial during the pandemic by allowing doctors to keep protective equipment on.
Nuance’s Dragon software uses artificial intelligence to transcribe speech and it improves over time by learning the nuances in individuals’ voice patterns.
The software is used across industries, from medical consultations to the board room. The deal was first announced in April this year and is set to bolster Microsoft’s voice recognition offering and give it greater access to the healthcare market.
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Regulators around the world have been increasing their scrutiny of so-called ‘killer acquisitions’ designed to stifle competitors early on. The CMA is worried that buying Nuance might limited Microsoft's own speech recognition investment. Last month the CMA blocked Facebook’s - now known as Meta - 2020 acquisition of Gif file company Giphy.
The UK investigation comes just three days after the European Commission gave ‘unconditional approval’ to the deal, according to Reuters’ sources. It followed a period of outreach by the EU regulator to competitors, in which it asked for any competition concerns about the deal. The deal has already been cleared by regulators in the US and Australia.
If it goes head, the Nuance deal would be Microsoft’s second-biggest acquisition since it bought professional networking site LinkedIn in 2016 for $26.2 billion.
According to the CMA’s website, the deadline for interested parties to comment is 10 January 2022. There is currently no timeline given for the Microsoft-Nuance investigation to be completed.
Microsoft, worth $2.57 trillion, is currently the world’s second largest company behind $2.94 trillion valued Apple. Microsoft shares are up 2% over the past month to $342.54 and have rallied more than 57% during 2021.
