Cisco Challenges Microsoft, Skype Merger
BRUSSELS (AP) — Networking company Cisco said Wednesday it is challenging Microsoft's $8.5 billion takeover of Skype at the European Union's top court to ensure Microsoft won't block other video conferencing services.
The European Commission, the EU's competition regulator, cleared the takeover in July and the merger was completed in October. Microsoft Corp. hopes that owning Skype will allow it to better compete across platforms with other tech giants like Apple Inc. or Google Inc.
But for Cisco Systems Inc., the world's largest maker of computer networking equipment, the Skype deal creates a serious challenger to its WebEx service, one of the most popular teleconferencing platforms.
"Cisco does not oppose the merger, but believes the European Commission should have placed conditions that would ensure greater standards-based interoperability," Marthin De Beer, the head of Cisco's video conferencing division, wrote in a blog post.
Cisco wants the General Court of the EU to check whether the Commission was right in clearing the Skype takeover without any concessions. It argues that the Commission should have required Microsoft to guarantee open standards for video conferencing, similar to what exists for mobile phone calls.
Such standards would eventually allow WebEx users to make calls to users of Skype and other services like Google Voice.
De Beer said that without these standards, Microsoft could "seek to control the future of video communications."
"Making a video-to-video call should be as easy as dialing a phone number," De Beer wrote. "Today, however, you can't make seamless video calls from one platform to another, much to the frustration of consumers and business users alike."
But Cisco fears that Microsoft will end up blocking Skype for users of other services, especially if it starts charging businesses for teleconferencing.
Skype, with roughly 170 million users, is by far the most popular voice-over-Internet service.
Antoine Colombani, a spokesman for the European Commission, said the Commission takes not of the appeal. "We will defend our decision in court," he added.