Bloomberg News

Cisco Asks EU Court to Overturn Microsoft-Skype Approval

February 17, 2012

(Updates with EU, Microsoft comment from fifth paragraph.)

Feb. 15 (Bloomberg) -- Cisco Systems Inc., the biggest maker of networking equipment, asked a European Union court to overturn antitrust approval for Microsoft Corp.’s $8.5 billion takeover of Skype Technologies SA.

The European Commission should have required Microsoft to use open standards for video communications to allow rival products to work smoothly with Skype before it authorized the deal, Marthin De Beer, a senior vice-president at San Jose, California-based Cisco, said in a blog post.

Microsoft won unconditional approval from the commission, the EU’s antitrust agency, in October to buy Skype, the world’s most popular international calling service. EU regulators said the deal wouldn’t harm competition for video communications services because the market was growing and they faced “numerous players, including Google.”

The commission “should have placed conditions that would ensure greater standards-based interoperability, to avoid any one company from being able to seek to control the future of video communications,” said De Beer.

Microsoft is “confident that the decision will stand up on appeal,” said Jesse Verstraete, a Brussels-based spokesman for the company. EU approval of the deal followed “a thorough investigation of the acquisition in which Cisco actively participated.”

The commission will defend the decision in court, said Antoine Colombani, a spokesman for the regulator in Brussels.

Microsoft’s plans to integrate Skype with its Lync messaging and teleconferencing software for corporate customers “could lock-in” companies to Microsoft’s products, Cisco said. By 2016, video will account for more than 70 percent of all mobile traffic, up from about 52 percent in 2011, according to Cisco.

--Editors: Heather Smith, Christopher Scinta

To contact the reporter on this story: Aoife White in Brussels at awhite62@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net


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