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EU opens investigation into Microsoft's $16 billion acquisition of Nuance

by John R. Fischer, Senior Reporter | December 13, 2021
Business Affairs European News Health IT
The EU is investigating if the proposed acquisition of Nuance by Microsoft would harm competition in Europe
Microsoft’s $16 billion acquisition of Nuance Communications has hit another roadblock, this time in Europe.

The EU antitrust regulator has asked customers and competitors to write up concerns in a questionnaire that includes questions on whether they see both companies as competitors and if the acquisitions would negatively impact their own businesses, according to Reuters.

Compared to minimal reviews performed by the U.S. Department of Justice in June and the Australian Competition Commission in October, the EU’s probe is the most extensive one carried out around the deal by an antitrust authority. Both companies filed for approval from the European Commission’s competition bureau last month, and the regulator has until December 21 to approve the deal or launch a deeper investigation.

Proposed in April, the acquisition would allow Microsoft to integrate Nuance’s speech and conversation AI software into the Microsoft Cloud for Healthcare. Used to automate note transcriptions for doctors, the technology is expected to accelerate the adoption of cloud-based AI tools for healthcare providers.

As part of the deal, Microsoft would pay $56 in cash per share of Nuance and assume Nuance’s debt, bringing the total value of the deal to $19.7 billion and making it the largest acquisition the company has made in years. While initially expecting to close the deal by the end of this year, the companies announced last month that they were pushing the timeline back to somewhere between the final quarter of 2021 and the first quarter of 2022.

Nuance says it currently serves 77% of U.S. hospitals. In any of its deals, it can use customer data to advance its voice recognition systems. Since big cloud vendors do not have unrestrained access to customers’ data for research and development, acquiring Nuance offers Microsoft a unique opportunity but is a concern to some.

Additional potential concerns may include the fact that Microsoft could force its Office suite on Nuance customers if it were to package them together, said Steven Weber, a University of California Berkeley professor studying the intersection of technology and health care, in an interview with Reuters.

Until now, Microsoft has been able to avoid antitrust lawsuits and investigations over the last decade, unlike competitors like Alphabet Inc.’s Google, Facebook, Apple and Amazon. In addition to big tech companies, high up companies in the healthcare industry have also faced pushback from regulators around potential deals.

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