Microsoft foils EC with clever Menage a Trois

The European Commission was forced to curtail its antitrust investigation of Microsoft and Time Warner’s plan to purchase ContentGuard after Thomson agreed to take a stake in the digital rights management outfit as well. The EC had been investigating the purchase because it feared that Microsoft might use its interest in ContentGuard to unfair advantage against its rivals. Thomson’s involvement in the transaction doesn’t necessarily allay the EC’s concerns, but it does prevent it from acting on them. The commission has no legal authority to review mergers and acquisitions involving more than two equal co-owners. Microsoft effectively sidestepped the EC by bringing in a third owner. “Through the conjunction of Thomson’s acquisition of an equity stake, and of changes in ContentGuard’s governance structure, no shareholder will have control over ContentGuard,” the EC said in a statement. “Thus this transaction is not subject to EU merger rules.”


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