Cisco Goes To Court Against Microsoft's Skype Acquisition
Bangalore: Cisco, the largest maker of computer networking equipment, has asked the European Union (EU) regulators to withdraw its approval of Microsoft's 2011 takeover of Skype. It argues that EU's approval on the merger was wrong, as it allowed the creation of monopoly, reports Reuters.
Skype had over 170 million users at the time of deal. After Microsoft purchased Skype, the most popular international calling service for $8.5 billion, a third of the world's voice calls are now on Skype. Currently it has over 280 million users, who are using the service for more than 100 minutes every month.
The Microsoft acquisition "marked a tipping point in the video communications market", Cisco's lawyer told judges at Europe's second-highest court. "The merger created an effective monopoly and condemned competitors to a niche. The reasoning applied (by the Commission) incurred numerous errors," he said.
For Cisco, the case is important, since many consumers and companies are abandoning traditional fixed-line and mobile. And it coincides, the area in which Cisco had planned to expand its presence.
However, one of the lawyers for the Commission told Cisco's arguments were unconvincing. Referring to emerging technologies and the existence of other potential rivals to Skype such as Google Talk and Viber, which could make the Skype outdated.
The court’s verdict has not been out, and is expected the judges will rule out the same in the coming months. Just in case if the verdict turns out against Cisco they can re-appeal the same to the European Court of Justice, the EU's highest court.