Microsoft acquisition of Skype challenged by Cisco Systems

A challenge has been made by Cisco Systems Inc. regarding the approval given by the European Commission to Microsoft’s $8.5bn acquisition of Skype.

They have made their challenge in a bid to stop Microsoft from further tightening its stranglehold on web based video calls. Cisco released a statement saying that the commission should have placed several conditions on the deal.

These included placing conditions such as that the Skype video calling service also had to be operated on competing platforms. Cisco also said that they weren’t opposed to the merger overall, just that they thought the ruling had been unfair. They said that they were effectively limiting people to call people using only their server, and if this was attempted with mobile phones it would have immediately have been dismissed.

A spokeswoman from Microsof has said that the company where totally confident that the appeal will fail and the decision of the committee will stand. John Chamber is the chief executive of Cisco and he has repeatedly said that the increasing use of communication via video will be a major technological trend in years to come.

The appeal, which will be heard at the General Court of the European Union, could greatly help the San Jose, California company who produce networking equipment to effectively defend their turf, but what could suffer as a result is the working relationship that Cisco currently enjoys with Microsoft as a customer, partner and supplier. They have said that their main goal was to make video calling as seamless and easy as emails.

Last October, the EU’s antitrust watchdog cleared the proposal by Microsoft to acquire Skype, the provider of internet video and voice communications. The merger, which was completed a week after the commissions approval, is one of the heftiest acquisitions that Microsoft has made. It is seen as Microsoft’s attempt to expand further into the mobile devices market.