Cisco Systems Inc said EU regulators made a “manifest error” in approving Microsoft Corp’s US$8.5 billion takeover of Skype Technologies SA and would appeal.
The world’s biggest maker of networking equipment is asking the EU’s General Court to overturn the European Commission’s unconditional antitrust approval for Microsoft’s acquisition of Skype, the world’s most popular international-calling service. EU regulators ruled in October that the deal would not harm competition for video-communications services because the market was growing, with “numerous players, including Google.”
Cisco said regulators failed to examine antitrust concerns that Microsoft would control more than 80 percent of the market for consumer video calls. Combining that with the Redmond, Washington-based company’s video-communication service for business may allow Microsoft to exclude competitors from making compatible products, according to a filing published in the EU’s Official Journal on Saturday.
“The merging company will have both the increased ability and the incentives to deny interoperability with competing enterprise communications,” the filing said.
EU regulators have said they would defend the decision in court.
Microsoft said in a statement it is confident the commission’s ruling on the completed deal will stand up on appeal because regulators did “a thorough investigation” of the acquisition.
“Cisco feels that the European Commission should have imposed conditions” on the deal to ensure that Microsoft’s products will work well with those of competitors, Cisco’s general counsel Mark Chandler said in an e-mailed statement.