The European Commission approved the buyout under EU merger regulations, because it “would not significantly impede effective competition in the European Economic Area”.
The Commission found that Microsoft would not gain anything by removing Skype from competing platforms like Google’s Android or Apple’s iOS because that would not help ‘maintain and enhance the Skype brand.” As for concerns that it might be tied to or bundled with Microsoft products, the EU said that “the vast majority of consumers who acquire a PC with Skype already installed are registered Skype users and .. most of them subsequently download a version different from the pre-installed one.
The Commission additionally said, “The investigation confirmed that Skype has a limited market presence for these products and does not compete directly with Microsoft’s enterprise communication product Lync, which is mostly used by large enterprises.”
In June, regulators in US gave their go-ahead to the deal deciding that there was sufficient competition from other major players, including Google. On the EU approval, Brad Smith, Microsoft general counsel and EVP commented, “We are pleased that the EU has approved Microsoft’s acquisition of Skype. This is an important milestone, as we have now received clearance from both the United States and the European Union. We look forward to completing soon the final steps needed to close the acquisition, bringing together the employees of Microsoft and Skype, and creating new opportunities for people to communicate and collaborate around the world.
In May of this year, Microsoft announced that it would be purchasing Skype at a price of $ 8.5 billion. “We are committed to optimizing Skype for the TV with Xbox and Kinect for the Windows Phone and the Windows PC. At the same time, we want to extend the reach of Skype by connecting Skype users with users of our Outlook products, our Lync enterprise unified communications product, Xbox LIVE, and other opportunities like Messenger and Hotmail,” Steve Ballmer, CEO, Microsoft had said at the news conference in May when the deal was disclosed.
The EU’s decision overrules a complaint made by an Italian rival to Skype, Messagenet. Last month Messagenet asked regulators to block the deal unless Microsoft confirmed that it would not bundle Skype with its Office products.
Lync, formerly Microsoft Office Communicator, is composed of both server and client pieces, and is under the general Office umbrella.
Messagenet based its complaint on EU’s arguments in a long-drawn case against Microsoft over the bundling of a media player with Windows. The case ended in 2007, with Microsoft losing on appeal and paying a fine of $ 1.4 billion in the following year.
In another case, Norwegian browser maker Opera alleged that Microsoft’s bundling of Internet Explorer gave IE an unfair advantage over other browsers. On EU’s insistence, the software giant agreed to display a ‘browser ballot screen’ that let users choose which browser they installed on their Windows PCs.
In recent months, Skype has added video calling to a number of Android phones and released an iPad app. While Microsoft obviously lauded EU’s decision approving the Skype deal, Messagenet chose not to comment on the same.