The European Commission is taking a closer look into Microsoft Corp’s $16 billion acquisition of transcription technology company Nuance Communications Inc and has asked customers and competitors to draw up a list of concerns.
The outreach is the most extensive scrutiny by the EC since the companies announced the deal in April, said a source familiar with the matter at hand.
Microsoft declined comment.
Nuance did not respond to requests for comments.
Following a minimal review in June, the U.S. Department of Justice said it would not contest the deal. In October, the Australian Competition Commission said it would also not contest the acquisition.
Last month, both companies filed for approval from the European Commission’s competition bureau; the EC has until December 21 to clear the deal or open a bigger investigation.
Both companies expect to close the deal by the end of this year; last month they said, the timeline could roll over to the next year as well.
The EC’s questionnaire asks whether Microsoft and Nuance are competitors and whether a tie-up could affect clients and rivals, including whether Microsoft could favor Nuance over competing services.
Nuance primarily sells transcription technology that is popular among doctors and call centers that want to automate note-talking. According to analysts, deal will bolster Microsoft’s presence in the healthcare market since it will allow it to bring new voice and medical data to train its artificial intelligence offerings in health, speech and biometric security.
Like many of its peers, Microsoft has grown its business through acquisitions, but in the last decade, Microsoft has avoided being a target by competition authorities unlike its competitors such as Alphabet Inc’s Google, Meta Inc, Apple Inc and Amazon.com Inc. All of them are facing antitrust lawsuits and investigations on numerous accounts.
According to Steven Weber, a University of California Berkeley professor who is studying the intersection of technology and health care, potential concerns regarding the deal could include Microsoft forcing its Office suite on Nuance customers by bundling them together.
According to Nuance, it serves 77% of all U.S. hospitals.
According to its former CEO Paul Ricci, Nuance’s strength lies in the fact that it could use patient data to advance its voice recognition systems.
Case in point, a Nuance contract with Augusta University Medical Center states, “Customer shall provide Nuance access to voice and text data…and grants Nuance a perpetual, royalty-free license to copy, use and analyze such data for speech recognition research.”
Cloud vendors including Microsoft and Amazon do not have unfettered access to customers’ data for research and development; the opportunity to acquire such relationships and data could explain Microsoft’s interest in Nuance, said former employees.