OPINION
By KELVIN DAVIS
(Kelvin Davis is the director or Greymouse, a cloud service-provider that supplies high quality, time-bound and cost-efficient services through its own facility in Fiji.)
Having successfully brushed off a court challenge from rival Cisco, Microsoft can now continue to market Skype’s video calls to consumers and businesses without making any concessions to Cisco or others that offer the same products.
Europe’s second highest court ruled against claims by Cisco that Microsoft’s $8.5 billion takeover of messaging service Skype would harm competition.
http://tinyurl.com/crn-cisco-court-skype
Cisco’s Concerns
Cisco’s concern about the Skype deal stems from the fact it sells more expensive hardware to help companies with video conferencing, while Microsoft’s alternative based on Skype can do much the same via a computer equipped with just a webcam.
At a hearing in May, Cisco said the European Commission was wrong to approve the deal without demanding concessions from Microsoft.
- Defending itself against Microsoft, Cisco had pushed for a common set of technology standards in video conferencing to make sure that products offered by different firms work together.
- Cisco had hoped to get backing from the EU case to ensure such “inter-operability” of video calls.
Senior vice president, Cisco worldwide field operations Chuck Robbins after first having acknowledged Microsoft as an actual close partner of Cisco, said that he didn’t think, at some point in the future, you are going to want to bet your business, or our customers are going to want to bet their collaboration architectures, on the hope that Microsoft gets along well with Apple and Google.
http://tinyurl.com/crn-cisco-swings-microsoft
Court’s Ruling
- The Luxembourg-based General Court said Cisco failed to show that the takeover would harm competition.
- The judges said that the merger does not restrict competition either on the consumer video communications market or on the business video communications market.
- The court further added that Cisco’s large share of the enterprise communications market and the existence of other rivals prevents Microsoft from impeding competition in this sector.
What the Ruling means
for Consumers
Both the Commission and Microsoft welcomed the court ruling.
- A third of the world’s voice calls are now made on Skype, with more than 280 million users spending more than 100 minutes monthly
- Consumers and companies have been switching to cheaper Internet-based voice and video services such as Skype, Viber, Google Talk and WhatsApp.
For the fifth year in a row, Microsoft and HP ranked as the most important vendors for Australia’s reseller community. This is despite the 
challenges that both giant vendors have faced in recent years. Indeed Microsoft’s importance has increased among resellers in the past 12 months.
http://tinyurl.com/crn-who-top-vendors-the-aspx
Despite being disappointed that the court did not require the Commission to revisit inter-operability requirements for Microsoft/Skype merger, Cisco remains committed to inter-operability and will continue to work to make video calling as easy as making phone call or sending an email.
The last successful court challenge to a Commission merger-approval decision was in 2002 in a case involving the Sony Music and BMG record labels.