EU Approves Microsoft's $8.5 Billion Acquisition Of Skype

Leena Rao currently works as a writer for TechCrunch. She recently finished graduate school at the Medill School of Journalism at Northwestern University, where she studied business journalism and videography. From 2004 to 2007, she helped lead Congresswoman Carloyn Maloney's community outreach and relations efforts in New York City. She graduated from Columbia University in 2003, where she was... → Learn More

New business division within Microsoft

Skype will become a new business division within Microsoft, and its current chief executive Tony Bates will assume the title of president of the Microsoft Skype Division, reporting directly to Microsoft CEO Steve Ballmer. Many believed that Microsoft overpaid for Skype, especially considering the fact that Facebook and Google were as well sniffing around the VoIP (Voice over Internet Protocol) company. And this was Microsoft’s biggest acquisition to date.

The European Commission has cleared in accordance with the EU Merger Regulation the proposed acquisition of the Internet voice and video communication provider Skype by Microsoft Corporation because the deal would not significantly impede effective competition in the European Economic Area 1 or any substantial part of it.

The area of consumer communications

In the area of consumer communications, the investigation found that the parties’ activities mainly overlap for video communications, where Microsoft is active through its Windows Live Messenger. Nevertheless, the Commission considers that there are no competition concerns in this growing market where numerous players, including Google, are present.

For enterprise communications, the investigation confirmed that Skype has a limited market presence for these products and does not compete directly with Microsoft’s enterprise communication product Lync, which is used for the most part by large enterprises.