MERGERS : COURT CLEARS MICROSOFT'S ACQUISITION OF SKYPE.

Cisco and Messagenet lost out to Microsoft, on 11 December, when the EU's General Court rejected their appeal against a 2011 decision by the European Commission, which found that the acquisition of Skype by Microsoft was compatible with EU competition law (Case T-79/12). The claimants, who both provide internet-based communications services and software for companies and the general public, said that the merger would create a monopoly on this market, and would hinder competition.

Concerning communications services to the general public, the court found that the high market shares and high degree of concentration on that segment of the market are not indicative of a degree of market power that would enable Microsoft to significantly harm effective competition. The consumer communications sector, it emphasised, is a recent and fast-growing sector characterised by short innovation cycles in which large market shares may turn out to be ephemeral. Moreover, Microsoft, which has traditionally held a very large share of the PC software market, is less present on new operating devices, such as tablets and smartphones, which are becoming increasingly important on the consumer communications market. Any attempt to increase prices of communications for PC users may encourage them to switch to alternative devices, since these services are usually free. The judgement says: "Competing operators of Microsoft have sufficiently large market shares to...

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