EU antitrust regulators give Microsoft-Skype deal green light

Commission clears $8.5 billion acquisition, says 'no competition concerns'

Antitrust regulators in the European Union today approved Microsoft's $8.5 billion acquisition of Skype, the online telephone and chat giant.

"The Commission considers that there are no competition concerns in this growing market where numerous players, including Google, are present," the European Commission, the EU's antitrust agency, said in a statement today, referring to competition concerns for consumers, who make up the bulk of Skype's customers.

The commission also dismissed concerns that the deal would stifle competition in the enterprise communication market.

"The investigation confirmed that Skype has a limited market presence for these products and does not compete directly with Microsoft's enterprise communication product Lync, which is used mostly by large enterprises," the commission added.

Microsoft announced the proposed purchase of Skype last May, saying then that it would pay $8.5 billion to the investment group that acquired a majority interest in the Internet telephony company from eBay in 2009.

"We're committed to optimizing Skype for the TV, with Xbox and Kinect, for the Windows Phone, and the Windows PC," said Microsoft CEO Steve Ballmer at a May 10 news conference that unveiled the deal. "At the same time, we want to extend the reach of Skype by connecting Skype users with users of our Outlook products, our Lync enterprise unified communications product, Xbox LIVE, and other opportunities like Messenger and Hotmail."

Microsoft applauded the EU antitrust watchdog's decision.

"This is an important milestone, as we've now received clearance from both the United States and the European Union," said Brad Smith, Microsoft's lead lawyer, in a Friday statement. "We look forward to completing soon the final steps needed to close the acquisition."

In June, U.S. regulators at the Department of Justice gave Microsoft the green light after also deciding that there was sufficient competition from other major players, including Google.

The Commission's decision stymies a complaint submitted by Messagenet, an Italian rival to Skype, which last month asked regulators to block the deal unless Microsoft agreed not to bundle Skype with its Office products.

Lync, formerly Microsoft Office Communicator, is composed of both server and client pieces, and is under the general Office umbrella.

Messagenet's complaint resurrected arguments that the EU had used against Microsoft for years in a case over the bundling of a media player with Windows. That action ended in 2007 when Microsoft lost on appeal; it paid a $1.4 billion fine the following year.

Later, Norwegian browser maker Opera complained that Microsoft's bundling of Internet Explorer gave IE an unfair advantage. Under pressure from the EU, Microsoft agreed to display a "browser ballot screen" that let users choose which browser they installed on their Windows PCs.

Messagenet did not reply to a request for comment on the EU Commission's decision today.

In May, Ballmer promised that if it acquired Skype, Microsoft would continue to develop and support the software on rival operating systems, including Apple's Mac OS X and Google's Android.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His e-mail address is

See more articles by Gregg Keizer.

Copyright © 2011 IDG Communications, Inc.

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