EU Holds Off on Microsoft’s Content Guard Buy

The European Union (EU) has delayed by two weeks its review decision about the proposed Microsoft and Time Warner joint venture to control DRM play Content Guard. The decision had originally been expected to be made today.

Back in April, Microsoft and Time Warner announced their intentions with ContentGuard. Microsoft, which already had a stake in the Bethesda, MD, company, has proposed (with Time Warner) to purchase the remaining equity that it does not own from Xerox , the originator of Content Guard’s technology.

Content Guard is principally a DRM technology with a DRM patent portfolio that it sells for licensing rights. Content Guard’s XrML is the basis of the recently approved ISO MPEG REL standard, which assigns rights and usage to digital objects.

The Microsoft/Time Warner partnership on DRM essentially began last year as part of the legal settlement between Time Warner and Microsoft on behalf of Netscape. Time Warner had brought a private antitrust lawsuit against Microsoft over its bundling of IE on the Windows platform.

The EU did not issue a formal statement that clarifies the reasons for the delay, which may or may not have significant repercussions for the deal and DRM in Europe.

“In terms of a delay, it’s possible that a delay may be a good thing,” Jupiter Research Analyst Todd Chanko told “But what it does fundamentally mean is that whatever plans they may have for extending Content Guards’ global reach and thereby extending its effectiveness has been hampered.” (Jupiter Research and this publication share the same parent company.)

Chanko said a delay could potentially push back whatever plans the two companies have for extending Content Guard technology in the EU. “If one part of the world is still questioning their rationale for joining forces and developing and enhancing technologies that protect digital content that’s not going to be a good thing,” he said.

The EU’s decision to delay the decision may not necessarily be a bad thing either, he added. “It could mean that Microsoft/Time Warner lawyers have provided additional information to the court on their behalf.”

From a larger point of view, whatever decision the EU decides to make in the end, it certainly does not spell the end of DRM in the EU. “Whatever the specific issues may be concerning the EU’s review of content guard doesn’t mean ipso facto that the EU is somehow against DRM or that it means that DRM is dead in the water,” Chanko explained. “Content guard is only one element in the larger mosaic of DRM applications available.”

News Around the Web