EU Holds on ContentGuard Deal

European Union antitrust regulators called a timeout of their antitrust investigation this week to a proposed Microsoft/Time Warner acquisition.

An EU spokesperson based in the U.S. told he had received no information about a suspension of the investigation. A second EU spokesperson based in Brussels told reporters that the commission was holding off on the investigation while it awaited official notification from Microsoft and Time Warner about Thomson’s involvement.

“There is information still missing, so we stopped the clock for the moment,” the spokesperson told the Associated Press.

A source familiar with the investigation confirmed to that the investigation was on hold, calling the timeout “a very normal part of the process.”

Neither ContentGuard nor Time Warner spokespersons would confirm the reports that the EU had suspended the investigation. A Microsoft U.S. spokesperson said he had no information, but had no reason to question the reports.

In April 2004, Microsoft and Time Warner announced plans to make a final acquisition of ContentGuard by buying out Xerox, they notified the European Commission as a courtesy. Xerox spun ContentGuard, a vendor of digital rights management (DRM) technology, out of its R&D labs in 2000.

But instead of rubber-stamping the deal, the EU opened an in-depth probe into whether the deal might strengthen Microsoft’s dominance in the DRM technology market. The investigation had a December 22 deadline.

On November 22, Thomson bought into the deal, acquiring an aggregate 33 percent voting stake in four-year-old ContentGuard from Microsoft, Time Warner and Xerox. Thomson , a Parisian company whose brands include RCA, Technicolor and Grass Valley, said it could make the deal more palatable to the EU.

The Paris-based Thomson said Monday it would make a strategic investment in ContentGuard. The deal places Thomson in partnership with current investors Microsoft and Time Warner.

Microsoft is a long-time strategic investor in ContentGuard, which holds 16 patents and has more applications in process. ContentGuard’s XrML is the basis of the recently approved International Standards Organization (ISO) MPEG Rights Expression Language (MPEG REL) standard, which assigns rights and usage to digital objects, and Microsoft uses the technology for its Rights Management Services enterprise information protection services.

According to JupiterResearch, U.S. companies will spend some $274 million on enterprise DRM software by 2008, up from $36 million this year. (JupiterResearch and are both owned by Jupitermedia.)

News Around the Web