Cisco Urges The European Court To Block Microsoft’s Purchase Of Skype

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Skype

Almost two years ago now Microsoft gained approval from all governments, including the European Union, on its acquisition of Skype.  The European Commission allowed Microsoft to buy Skype without having to make any concessions.

Cisco was not happy about this, as they have their own video conferencing solutions, and has been against Microsoft’s purchase from the beginning.  Cisco along with Italian fixed-line and Internet telephone provider Messagenet SpA is now going to the EU’s second highest court, in Lexembourg, to appeal the European Commission’s decision to approve the deal.  Cicso will argue that the Commission made several “manifest errors” in assessing the $8.5 billion Microsoft-Skype deal.  In addition Cisco will argue that the combined company’s dominant share in the communications market gave it the ability and the incentive to refuse to provide data that would allow rivals to work with the merged firm’s products.

The last time a company successfully challenged the Commission decision was in 2002 in a case involving Sony Music and BMG record labels. In most cases the court sides with the Commission and a reversal is rare.  If Cisco loses this decision, they can appeal one more time the EU’s highest court, the European Court of Justice.

I find Cisco resorting to these tactics to be quite sad.  They should compete in the marketplace and create a better product at a more competitive price.  Microsoft publically stated that it hopes to have Skype, Lync, and Cisco software all interoperate by late 2014.

Source: Reuters



About Author

Suril is a scientist, journalist and obsessive Microsoft observer. He holds an advanced degree in Biotechnology with minors in Biochemistry, Microbiology, and Molecular Biology. Send him tips on twitter: http://www.twitter.com/surilamin

  • http://twitter.com/Da_PHAT_Ninja Michael Lococo

    So if you can’t compete with a better product sue the competition!

    • GG002

      Just what I was thinking! Cisco has never done anything for me personally, so their loss. Microsoft is at least doing some effort to give the average joe simple and powerful tools.

  • Bugbog

    Whilst I can understand Cisco’s viewpoint, i.e. the way Microsoft will soon capture (or already has) a major portion of the video-conferencing market through it’s Skype/Lync integration in to its myriad inter-linked platforms; Windows 8/RT, WP8, Xbox, Office, Server-side, etc. The fact of the matter is, Cisco, aside from a certain percentage share, would only have captured minimal additional market-share, as, if I’m not mistaken, their M.O. was to capture market-share by default, (as the internet’s backbone) and not through any particular over-arching effort!

    It’s not like Skype is a free service? [Mostly]. So, if there is a competing product with similar, or better, service, that would offer consumers a choice! (Kind of how Microsoft is competing uphill against the “verb” Google!). Outside of corporate, where Are Cisco’s competing products?

    Instead we have the “Chicken & Egg” argument! “It’s going to be dominant, so it likely won’t want to offer us proper access to its API’s?!”

    In no way do I wish to use any product, that, by its nature, stifles competition. But neither do I wish to see a product’s potential blocked, due to green-eyed envy!

    Skype wasn’t a monopoly two years ago, when Microsoft acquired it. And neither is it now. There has been (and still is) time to mount effective competition against any ‘perceived’ advantage that Microsoft will supposedly have. After all, it’s not like Cisco is any run-of-the-mill small company? Neither is this similar to AT&T’s efforts to acquire Sprint.

    So I’d suggest Cisco ‘put up’, Before attempting to shut Another up!

    • techieg

      The issue is not a problem with MS buying Skype. The main problem is that WebEx sucks and Cisco knows it now that it is too late since they already bought it. Cisco WebEx will never gain majority market, so they’d rather try to block MS from buying Skype and fail yet again.

  • techieg

    Sour Cisco. They bought WebEx and now have their own lame video conferencing tool but they don’t want MS to buy Skype? I don’t get this at all.

  • koenshaku

    WebEx is completely different from Skype I don’t see what they are getting at here.

    • DoctorSnyder

      LYNC

  • Ali

    LOL @ Cisco

  • tomakali

    Microsoft buy Cisco LOL