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Microsoft's Skype purchase survives Cisco challenge

A European court rejects Cisco's appeal to quash the merger as approved based on concerns that it would create a monopoly.

Lance Whitney Contributing Writer
Lance Whitney is a freelance technology writer and trainer and a former IT professional. He's written for Time, CNET, PCMag, and several other publications. He's the author of two tech books--one on Windows and another on LinkedIn.
Lance Whitney
2 min read
Microsoft's Steve Ballmer and Skype's Tony Bates.
Microsoft's Steve Ballmer and Skype's Tony Bates. Jay Greene/CNET

Microsoft's takeover of Skype has gotten another official thumb's up from the courts.

In a ruling reached Wednesday, the European Union's General Court upheld the decision to grant Microsoft's $8.5 billion acquisition of Skype in 2011, Reuters has reported.

Networking giant Cisco Systems had challenged that decision, arguing that the merger as approved was anticompetitive. Cisco found fault with the European Commission for failing to get any concessions from Microsoft before approving the deal.

But the judges rejected that argument.

"Microsoft's acquisition of Skype is compatible with the internal market," the judges said, according to Reuters. "The merger does not restrict competition either on the consumer video communications market or on the business video communications market."

Cisco sells videoconferencing equipment and services to the corporate market and clearly is concerned about a combined Microsoft/Skype stealing away some of that business. The company can still appeal Wednesday's decision to the EU Court of Justice, Reuters added.

Commenting on the decision, a spokesperson for Cisco sent CNET the following statement:

Cisco is disappointed that the Court did not require the Commission to revisit interoperability requirements for the Microsoft/Skype merger, however we remain committed to interoperability and will continue to work to make video calling as easy as making a phone call or sending an email. We are hopeful that in the interest of customers and consumers, Microsoft and others in the industry will join us and continue to rally around this ideal and work together to achieve an open, interoperable video community.

The European Commission naturally was pleased with the ruling, issuing a statement that "today's judgment by the EU General Court (GC) confirms that the Commission was correct in its assessment that the acquisition of Skype by Microsoft would not significantly impede effective competition in the European Economic Area (EEA)."

Updated 8:15 a.m. PT with comment from Cisco.