The target, ContentGuard, is a leading provider of DRM
technology, which controls how copyrighted digital content, such as
DVDs or software, can be viewed, used, or abused.
Microsoft and Time Warner announced in April 2004 that, together
with ContentGuard, they had purchased most of the stake held in
that company by its original owner, Xerox.
The Commission began an investigation into the purchase in
August, after an initial review gave rise to fears that the
purchase of a leading DRM technology provider such as ContentGuard
might put Microsoft into a dominant position in that sector.
EU competition regulators were due to rule on the matter by 6th
January, but halted the review when Paris-based Thomson announced
in December that it had agreed to buy a 33% voting stake in
ContentGuard, potentially reducing the antitrust impact on the
market.
Thomson's acquisition took place yesterday, prompting the
Commission to announce that the transaction is no longer subject to
EU merger rules and that the investigation has accordingly been
dropped.
"Following the Commission's objections, the shareholding
structure and governing rules of ContentGuard have been
significantly modified," said the Commission. "Hence, Microsoft,
Time Warner and Thomson hold each a one-third stake and none of
them has control over ContentGuard. Consequently, Microsoft will no
longer be in a position to shape ContentGuard's licensing policy to
the detriment of Microsoft's competitors."
Paul Cappuccio, Time Warner Executive Vice President and General
Counsel, said: "We appreciate the hard work the Commission has done
on this case and we are pleased it could be resolved in a way that
was mutually agreeable."
The Commission has warned that it will closely monitor
developments within the sector and will take antitrust action if
necessary.
