Cisco to appeal Microsoft-Skype deal in European court

Cisco will appeal the European Commission’s approval of Microsoft’s $8.5 billion (€6.5 Billion) Skype acquisition, saying the agency should demand that the companies support standards for interoperability with other collaboration platforms.

Microsoft announced its plan to buy Skype in May 2011 and received approval from the European Commission last October. Microsoft executives recently have suggested the company may integrate Skype’s voice, text and video collaboration software more tightly with the Microsoft Lync collaboration system.

Cisco plans to appeal the European Commission’s decision at the General Court of the European Union, wrote Marthin De Beer, senior vice president of Cisco’s Video and Collaboration Group, in an official blog post. Cisco does not oppose the merger but wants conditions imposed on Microsoft.

If the merged companies don’t support the same open standards as other videoconferencing vendors, that will keep users from being able to make video calls as easily as they can make voice calls, De Beer wrote. That could stifle competition and innovation in the industry, according to De Beer.

"Microsoft’s plan to integrate Skype exclusively with its Lync Enterprise Communications Platform could lock-in businesses who want to reach Skype’s 700 million account holders to a Microsoft-only platform," De Beer wrote.

Specifically, Microsoft and Skype do not use the popular H.264 video codec or the SIP (Session Initiation Protocol) standard, according to someone familiar with the appeal who spoke on condition of anonymity. Users of videoconferencing platforms from Cisco and other vendors would not be able to call those on the Microsoft-Skype system except through an expensive gateway, the person said.

Cisco has been talking to Microsoft about interoperability commitments and gotten nowhere, and the opportunity to appeal the European Commission’s decision came after its approval and expires this week, the person said.

Microsoft defended the acquisition. "The European Commission conducted a thorough investigation of the acquisition, in which Cisco actively participated, and approved the deal in a 36-page decision without any conditions. We’re confident the Commission’s decision will stand up on appeal," a Microsoft representative said in a written statement.

IDG News Service

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