Cisco Systems Inc. lost a court bid to block the European Union’s unconditional approval of Microsoft Corp.’s $8.5 billion-takeover of Skype Technologies SA.
Cisco “failed to demonstrate” that the EU was wrong to clear the deal, the EU General Court, the 28-nation bloc’s second-highest tribunal, ruled today. The merger “does not restrict competition” in the markets for consumer- and business-video communications, the court said in a statement.
Microsoft’s plan to buy Skype, the world’s most popular international calling service, was waved through in October 2011 by EU regulators who said the deal wouldn’t harm competition because the market was growing and they faced “numerous players, including Google.”
Cisco, the largest maker of computer-networking equipment, said it was “disappointed” the court “did not require the commission to revisit interoperability requirements for the Microsoft-Skype merger,” according to an e-mailed statement.
Robin Koch, a Microsoft spokesman in Brussels, welcomed the court’s decision.
The European Commission said the ruling “confirms” its assessment of new markets and technologies. The decision to clear the deal “did not put the development of innovative products and services at risk,” said the Brussels-based EU antitrust authority.
Cisco had argued in its appeal that the EU regulator used “flawed reasoning” that conflicted with its approach in previous cases. It told the court that the Microsoft-Skype tie-up would give them a combined share as high as 90 percent of the market for video calls on Microsoft Windows-based computers.
The court said today that even if the deal gave Microsoft such a market share, it wouldn’t enable it “to significantly harm effective competition.”
The case is: T-79/12, Cisco Systems and Messagenet v. Commission.