The Commission has issued a formal statement of objections, outlining reasons why it believes the joint venture might create or strengthen a dominant position in the market.
The EC has been investigating the companies’ control of Digital Rights Management (DRM) vendor ContentGuard since August, after Time Warner became a strategic investor and Microsoft significantly expanded its existing minority stake.
Regulators are concerned, in particular, the deal might create or strengthen a dominant market position for Microsoft in the DRM market. The EC was also concerned a deal to control ContentGuard may slow development of open interoperability standards.
ContentGuard specializes in control and distribution of digital media, a subject Microsoft has become increasingly interested in in recent years, using the eXtensible Rights Management (XrML) specification.
Microsoft and Time Warner have two weeks to respond to the statement, details of which were not released, and may seek a hearing with the Commission to present their arguments. The companies have until January 6, 2005, to present any settlement terms, after which time the EC will device whether to approve joint ownership.
According to reports, though, the EC won’t block the move if the companies provide third parties access to ContentGuard’s technology.
