The European Commission is investigating the
proposed acquisition of DRM technology provider ContentGuard by Microsoft and Time Warner.
The last time the commission looked into Redmond’s doings,
it cost the software vendor $613 million.
After Microsoft and Time Warner
announced plans to
increase their holdings in ContentGuard in April, they
asked for the EU’s blessing on the deal under the European Union’s Merger
Regulation.
After a routine review of the July 12 request, the commission today said
it had opened an in-depth probe into whether the deal might strengthen
Microsoft’s leading position in the DRM technology market.
Microsoft had long been a strategic investor in four-year-old
ContentGuard, which makes DRM
with more in the pipeline. Microsoft, Time Warner and ContentGuard bought
out most of Xerox’s stake in the company; the ContentGuard
technology originated at Xerox PARC.
Microsoft and AOL, which at the time owned Time Warner, battled over
browsers, with AOL launching an antitrust suit against Microsoft for
crushing the Netscape browser. When the companies settled
that suit in 2003, they hailed the agreement as an opportunity
to work together to fight digital piracy.
Microsoft licenses ContentGuard’s technology for use in its Rights
Management Services enterprise information protection services. Time Warner
has not disclosed how it uses ContentGuard’s technology.
“Under Microsoft’s and Time Warner’s joint ownership, ContentGuard may
have both the incentives and the ability to use its IPR portfolio to put
Microsoft’s rivals in the DRM solutions market at a competitive
disadvantage,” the commission stated.
“The parties are cooperating fully with the commission as it is a complex
area,” a Time Warner spokesperson told internetnews.com. Microsoft
executives did not respond to a request for comment.
It’s a sensitive spot for Redmond. In March, the commission levied a record $613 million fine
against Microsoft for abusing its monopoly position
with the Windows operating system in European markets. The commission complained that
Microsoft’s bundling of its Media Player with the Internet Explorer browser
shut out competing media players. Microsoft paid the fine, but is appealing
the ruling.
