Cisco Loses Microsoft-Skype Challenge in EU

Published on December 11, 2013
by John Paczkowski

skype1-feature-featureDespite Cisco’s best efforts to undo it, the European Union’s approval of Microsoft’s 2011 acquisition of Skype will stand.

The EU’s General Court ruled Wednesday that Microsoft’s $8.5 billion takeover of the communication service is not anticompetitive, as Cisco had argued.

In a challenge mounted last year, Cisco said that the European Commission should have imposed restrictions on Microsoft’s purchase of Skype to prevent the company from ever seeking to control the future of video communications. Instead, it approved the merger with no such precautions.

“Imagine how difficult it would be if you were limited to calling people who only use the same carrier or if your phone could only call certain brands and not others,” Marthin De Beer, SVP of Cisco’s video and collaboration group, wrote in February of 2012. “Cisco wants to avoid this future.”

As does the EU. But evidently the agency feels that there’s no risk that it will come to pass from Microsoft’s Skype deal. Certainly it believes that Cisco failed to show that it would harm competition.

“Microsoft’s acquisition of Skype is compatible with the internal market,” the General Court said in its ruling. “The merger does not restrict competition either on the consumer video communications market or on the business video communications market.”

In a statement, Cisco said: “Cisco is disappointed that the Court did not require the EU to revisit interoperability requirements for the Microsoft/Skype merger; however we remain committed to interoperability and will continue to work to make video calling as easy as making a phone call or sending an email. We are hopeful that in the interest of customers and consumers, Microsoft and others in the industry will join us and continue to rally around this ideal and work together to achieve an open, interoperable video community.”

Return to: Cisco Loses Microsoft-Skype Challenge in EU