Europe’s second highest court has rejected Cisco’s challenge of Microsoft’s Skype acquisition. The European Commission approved the $8.5 billion deal in 2011, but Cisco sought to strip the EU approval almost a year later. Cisco argued at a hearing earlier this year that Microsoft’s acquisition of Skype created a monopoly, and that conditions should have been placed on the deal. Microsoft has since integrated its Lync communications service into the Skype platform to produce a proprietary system.
Reuters reports that the European General Court said Cisco failed to demonstrate how Microsoft’s acquisition of Skype would harm competition. “Microsoft’s acquisition of Skype is compatible with the internal market,” said the judges.
“The merger does not restrict competition either on the consumer video communications market or on the business video communications market.” Cisco can now appeal to the EU Court of Justice if the company wishes to challenge the takeover further.
Cisco’s concern over Microsoft’s Skype acquisition is obvious. The company sells a number of costly hardware video conferencing solutions to businesses, and Microsoft’s Lync alternative can transform ordinary PCs with a webcam into a software-powered video conferencing system.
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