Europe’s second highest court has rejected a complaint against the European Commission’s decision to allow the takeover of a major internet communications firm headquartered in Clausen.

Two technology industry rivals had challenged Brussels’ move to clear American software giant Microsoft’s $8.5 billion acquisition of Skype. The transaction was approved by the commission’s competition unit in the autumn of 2011.

US-based communications equipment provider Cisco and Italy-based communications service provider Messagenet filed an objection in February 2012 with the EU General Court in Kirchberg, claiming that the commission should have placed conditions on the transaction to prevent a monopoly from forming in video conferencing. They asked the court to cancel the clearance.

On Wednesday, the court said “the merger does not restrict competition” in either the business or consumer video communications market, and the deal was “compatible with the EU competition rules”.

The judges noted that technology was rapidly evolving in the space, making it unlikely that Microsoft would be able to achieve a monopoly. The case was dismissed “in its entirety”.

“Fast evolving markets”

A statement by the European Commission said the judgment confirmed its assessment of the Microsoft-Skype deal. “The commission’s decision to clear the transaction did not put the development of innovative products and services at risk. The commission will continue to ensure that competition in nascent and fast evolving markets is maintained,” it said on Wednesday.

A spokeswoman for Cisco told Delano that the company “is disappointed that the court did not require the commission to revisit interoperability requirements for the Microsoft-Skype merger, however we remain committed to interoperability and will continue to work to make video calling as easy as making a phone call or sending an email.”

“We are hopeful that in the interest of customers and consumers, Microsoft and others in the industry will join us and continue to rally around this ideal and work together to achieve an open, interoperable video community,” she said.

“We, at Messagenet, are disappointed with the decision as we truly believe that the merger of Microsoft and Skype warrants imposing that Skype interoperate with other internet based communication systems,” a company spokeswoman told Delano. “We continue to believe that interoperability is in the interest of the general public and we remain committed to open standards.”

A Microsoft spokesperson told Delano that “people around the world love and use Skype to stay in touch with family, friends and colleagues. We are glad that the EU General Court has confirmed the commission’s earlier decision.”

Final appeal still possible

Cisco and Messagenet have two months to appeal the judgment to the European Court of Justice, based in the same Kirchberg judicial complex. However, European courts have has not decisively ruled against commission competition decisions for more than a decade.

Neither the Cisco nor Messagenet spokeswoman indicated if the companies would appeal.

The case was number Case T-79/12 (Cisco Systems Inc. and Messagenet SpA v Commission).