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Software industry

European Commission Opens Investigation into Microsoft-Time Warner DRM Deal

Strategic Insights

— 1 min read

The European Commission has launched a full-scale investigation into a joint venture between Microsoft and Time Warner to develop anti-piracy software, citing concerns about the potential dominance of the technology and its impact on interoperability. The investigation, which has been ongoing since August 25, will examine the competitive concerns related to Microsoft's vertical integration in other markets. This move is seen as a response to the growing need for digital rights management (DRM) solutions, with the US Justice Department also focusing on peer-to-peer (P2P) networks.

Key Takeaways:

  • The European Commission has opened a full-scale investigation into the Microsoft-Time Warner deal to develop anti-piracy software, citing concerns about dominance and interoperability.
  • The EC has been reviewing the deal since August 25 and has until January 6 to complete the investigation.
  • Microsoft and Time Warner were supposed to become DRM buddies under the terms of their $750 million antitrust settlement, which included the acquisition of Contentguard Holdings from Xerox.
  • Microsoft has a 25% stake in Contentguard Holdings, which was acquired for $750 million.
  • InterTrust Technologies, a potential Microsoft DRM rival, was acquired by Sony and Philips for $453 million (excluding Philips' $7 million payment for patent rights).
  • Microsoft has been ordered to strip DRM technology from its Media Player, a decision currently pending before the European court of appeals.

Statistics:

  • Date of Microsoft-Time Warner deal: April (no specific date mentioned)
  • Amount of Microsoft-Time Warner deal: $750 million
  • Microsoft's stake in Contentguard Holdings: 25%
  • Amount paid by Microsoft for InterTrust Technologies: $440 million
  • Amount paid by Sony and Philips for InterTrust Technologies: $453 million (excluding Philips' $7 million payment for patent rights)
  • Timeframe for EC investigation: Until January 6.

Sources:

  • "EC opens probe on Microsoft, Time Warner deal" by ZDNet (no date mentioned)
  • "Microsoft-Time Warner DRM deal: European Commission opens investigation" by The Register (no date mentioned)
  • "European Commission puts Microsoft Media Player under investigation" by IDG News Service (no date mentioned)

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