Microsoft (MSFT) Gains EC Approval for $8.5B Skype Acquisition

October 7, 2011 1:25 PM EDT
Microsoft (Nasdaq: MSFT) has just overcome a major hurdle in it's proposed acquisition of Skype.

In a release on its website Friday, Microsoft affirmed it received approval from the European Commission in its proposed $8.5 billion acquisition of Skype. The news follws speculation Wednesday the deal might be approved.

Microsoft commented, "This is an important milestone, as we’ve now received clearance from both the United States and the European Union." Following the EC nod, Microsoft will need to gain approval in Russia, Ukraine, Serbia, and Taiwan before it can consummate the merger.

In the early 1990s, Microsoft got tangled up in antitrust litigation with the European Union, stemming from a Novell complaint. The EU investigated Microsoft's abuse given its dominant position in the market. The first decision came in 2004, when the EU said Microsoft needed to disclose more interoperability information from rival software companies, which prevented making software compatible with Windows. Following much debate between the parties, Microsoft and the EU agreed to a flat €10,000, or 0.4 percent royalty. To date, Microsoft has been fined $1.68 billion a total of three times for breaching this. The issue is still ongoing.

With tensions over this case and others, getting approval from the EC without even a second look is impressive.

Microsoft shares are just about flat Friday afternoon.

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