Cisco’s opposition to Microsoft-Skype union blocked

The European Union’s General Court has ruled against claims by Cisco Systems Inc., that the $8.5 billion takeover by Microsoft Corp. of online video messaging firm Skype would harm completion.

The ruling allows Microsoft to continue marketing Skype’s video calling services to businesses and consumers without giving Cisco and companies providing similar services any concessions. This despite the fact that the 2011 acquisition allows Microsoft to grab hold of an 80 to 90 per cent share of consumer video communication on Windows PCs, when you include Skype and Windows Live Messenger services.

Cisco, last year warned the court that Microsoft could take Kkype in a proprietary direction and impede interoperability.

The court said that piece of the pie constitutes only a segment of the whole consumer communications market where Microsoft still faces competition. The court said rapid innovation in the sector means that large market shares may only last for a brief period and that Microsoft has a limited presence in the tablet and smart phone space.

Earlier in May, Cisco argued before the court that Microsoft’s purchase of Skype created a monopoly since the company is the world’s largest Internet and video messaging provider. Cisco said the European Commission needed to demand concessions from Microsoft.

The court however said the acquisition was “compatible with European competition laws.”

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Nestor E. Arellano
Nestor E. Arellano
Toronto-based journalist specializing in technology and business news. Blogs and tweets on the latest tech trends and gadgets.

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