Microsoft wins in court decision over Cisco challenging Skype takeover

By Rizza Sta. Ana

Dec 11, 2013 10:34 AM EST

Cisco failed its attempt to halt a proposed takeover of messaging service Skype by Microsoft Corp for $8.5 billion. According to a Reuters report, Europe's second-highest court ruled against Cisco's claims that the deal, which was announced in 2011, will be harming competition. The decision made on Wednesday could signal Microsoft to continue with its marketing regarding video calls by Skype to businesses and consumers without making any concessions to other companies, including Cisco, who offers similar products.

Cisco claimed in a hearing back in May that the acquisition of Skype by Microsoft could create a monopoly. Skyoe is the largest Internet video and voice messaging provider. Cisco also said the European Commission should not have given its approval on the deal without requiring Microsoft to make concessions.

The Luxembourg-based General Court said today that Cisco did not provide concrete proof on how the takeover could harm competition.

The judges said, "Microsoft's acquisition of Skype is compatible with the (European Union's) internal market. The merger does not restrict competition either on the consumer video communications market or on the business video communications market."

The European court also added that the large share Cisco has in the enterprise communications market and the presence of other rivals resulted to Microsoft not impeding competition.

Cisco filed its challenge claim with Messagenet SpA, an Italian fixed-line and Internet telephone provider and also a rival of Skype. Cisco said it will no longer appear to Europe's highest court, the EU Court of Justice.

Cisco spokeswoman Alison Stokes said, "Cisco is disappointed that the court did not require the Commission to revisit inter-operability requirements for the Microsoft/Skype merger. However we remain committed to inter-operability and will continue to work to make video calling as easy as making a phone call or sending an email."

The EU antitrust regulator said. "Today's judgment by the EU General Court confirms that the Commission was correct in its assessment that the acquisition of Skype by Microsoft would not significantly impede effective competition in the European Economic Area."

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