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EU court clears Microsoft acquisition of Skype

DPA Brussels | Updated on November 25, 2017 Published on December 11, 2013

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Microsoft’s 2011 takeover of the Skype online communication service was not in breach of EU anti-competition laws, a European Union court ruled on Wednesday, rejecting a complaint by rivals Cisco and Messagenet.

“The merger does not restrict competition either on the consumer video communications market or on the business video communications market,” the bloc’s General Court found.

The EU’s anti-trust regulators had cleared the $8.5 billion deal in October 2011. Cisco and Messagenet went to court, arguing that the merger would harm competition.

In its ruling, the court said that the companies were operating in a “recent and fast-growing sector characterised by short innovation cycles in which large market shares may turn out to be ephemeral.” Microsoft’s traditional dominance in the PC market stood in contrast to its smaller role in the smartphone and tablet computer market, the court found.

“Any attempt to increase prices of communications for users of PCs might encourage them to switch to alternative devices,” the court wrote — even more so since such services are usually provided for free.

The court also rejected the argument that Microsoft could restrict competition by providing preferential access to Skype for users of its in-house product Lync, which is aimed at the professional market.

There was no “direct and immediate” evidence that this could harm competition, the court said, adding that several factors stood in the way of such a combined service emerging.

Lync also faced competition from other large players in the professional communications market, the court found, noting that Cisco “alone holds a larger share of the market than Microsoft.”

Published on December 11, 2013
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