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EU Court Rejects Cisco's Challenge to Microsoft-Skype Deal
The European Court of Justice (ECJ) this week rejected Cisco's challenge to Microsoft's $8.5 billion acquisition of Skype, upholding an earlier European Commission (EC) decision to give the go-ahead to the software giant's May 2011 deal for the Internet video and voice-calling service.
Cisco and Italian VoIP provider Messagenet filed a complaint with the European Union's top court in February 2012 that alleged the Microsoft-Skype deal would hurt competition in the Internet voice and videoconferencing markets.
The networking giant's lawyers argued at a court hearing in May that Microsoft's acquisition of Skype would create a "monopoly" if the EU did not require Microsoft to make its Windows operating system interoperable with other communications tools besides Skype.
Cisco's VoIP and videoconferencing products are aimed at the enterprise and Skype has historically been a consumer platform. But the new Microsoft Skype Division has been trying to gain more penetration in the SMB and enterprise communications spaces, leading Cisco to worry that Microsoft could move to block other video-calling services from its Windows platform.
"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," Martin De Beer, senior vice president of Cisco's Emerging Business Group, wrote after the networking giant filed its complaint. "Cisco wants to avoid this future for video communications, and therefore today appealed the European Commission's approval of the Microsoft/Skype merger to the General Court of the European Union."
But in its Wednesday ruling, the ECJ dismissed that fear.
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