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October 17, 2011

Microsoft completes $8.5bn purchase of Skype

European Commission had cleared the deal last week

By CBR Staff Writer

Microsoft has completed its $8.5bn acquistion of Internet voice and video communication provider Skype.

Microsoft first announced the deal in May. But opponents to the deal had raised antitrust concerns about the deal. Opponents of the Microsoft-Skype deal – including Messagenet – had argued that Microsoft was again "bundling" software. Microsoft responded, saying that there are several platforms for Skype in today’s world, and that putting together Skype would make its products more popular than they are now. The company said that Skype would be available on Apple iOS and Google’s Android as well.

Last week, 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.

Microsoft has said that Skype will operate as a division within Microsoft, with Skype CEO Tony Bates joining Microsoft to run the division. Bates will report to Microsoft CEO Steve Ballmer.

Bates said about the deal, "When I think about what we can do together – the assets, the technology, the way both companies push forward with disruptive innovation – I see us reaching that goal quickly."

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"Microsoft is committed to the ubiquity of the Skype experience – communication across every device and every platform will remain a primary focus," said Bates.

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