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October 10, 2011

European Commission approves Skype’s acquisition by Microsoft

The deal will not significantly impede effective competition in the EEA, believes the EC

By CBR Staff Writer

The European Commission has cleared under the EU Merger Regulation the proposed acquisition of the Internet voice and video communication provider Skype by Microsoft.

The EC believes that the deal will not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

The commission found that the parties’ activities mainly overlap for video communications in the area of consumer communications, where Microsoft is active through its Windows Live Messenger.

The commission, however, considers that there are no competition concerns in this growing market where numerous players, including Google, are present.

According to the EC, Skype has a limited market presence for enterprise communications products, and does not compete directly with Microsoft’s enterprise communication product Lync, mostly used by large enterprises.

The Commission assessed the possibility for Microsoft to degrade Skype’s interoperability with competing services and/or to tie its own products, in particular its leading Windows operating system, with Skype, thereby limiting other players’ ability to compete.

The commission also found that Microsoft will not have an incentive to degrade Skype’s current interoperability as it is essential for Microsoft that Skype’s services are available on as many platforms as possible in order to maintain and enhance the Skype brand.

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The Commission was notified about the transaction on 2 September 2011 for regulatory clearance in the EEA.

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