Italian software firm attempts to block Microsoft’s Skype deal in Europe

By Tom Warren, on 29th Sep 11 10:32 pm with 35 Comments

Microsoft Skype deal

An Italian software company has filed a complaint in Europe over Microsoft’s purchase of Skype.

Messagenet, a software firm based in Milan, is attempting to block Microsoft’s Skype deal over concerns the U.S. software giant might bundle Skype with its Windows operating system. The New York Times reports that Messagenet filed its complaint on September 20. Microsoft is expected to close its Skype acquisition in October. E.U. competition commissioner, Joaquín Almunia, plans to reveal his decision on the takeover on October 7. The latest complaint could delay Microsoft’s deal and force the European Commission to consider any issues raised from Messagenet’s concerns. Messagenet also wants Microsoft to open up Skype’s Internet phone network to allow rival services to connect calls to Skype users. Microsoft issued the following statement in relation to Messagenet’s complaint:

“Skype is a valuable and popular product that Microsoft will continue to supply as such. The proposed acquisition is still undergoing regulatory review and we are working closely with the agencies. Until all regulatory approvals are obtained, it is business as usual at Microsoft and at Skype.”

The software giant announced its intentions to purchase Skype in May. Microsoft’s deal is valued at $8.5 billion cash and will see Skype CEO Tony Bates assume the title of president of the Microsoft Skype Division. Bates will report directly to Microsoft CEO Steve Ballmer. Microsoft says Skype will support Microsoft devices like Xbox and Kinect, Windows Phone and a wide array of Windows devices, and Microsoft will connect Skype users with Lync, Outlook, Xbox Live and other communities.

The Federal Trade Commission (FTC) stamped its approval on the deal in June. Microsoft is now waiting on European Commission approval before it can part with $8.5 billion for its purchase of Skype. Microsoft has no plans to alter Skype’s branding. Microsoft is getting “one of the greatest brands in the consumer Internet space,” said Skype CEO Tony Bates in a recent interview. “It is a verb. People talk about it in that way. They say Skype me.” Bates reassured Skype users that nothing will change, “you can expect strong commitment to the brand,” he added.

Skype currently has 170 million connected users and saw over 207 billion minutes of voice and video conversations in 2010 alone. Microsoft’s promise for Windows Phone, Xbox and Kinect Skype integration confirms that the company will look to use Skype broadly across its products. Skype was originally founded in 2003 and acquired by eBay in September 2005. An investment group led by Silver Lake acquired Skype in 2009. Microsoft refused to provide any comment on Friday regarding the FTC approval

  • Guest

    And I was hoping to get Skype with Mango.

    • Guest

      It wouldn’t stop you getting it with Mango, as long as MS still went ahead. It would probably just prevent MS from bundling it with Windows, at least in Europe.

  • http://twitter.com/oolong2 oolong2

    It makes you wonder where the line is between “anti-competition” and just adding a feature to your OS…

    What about calculator, notepad,  windows media player, IIS, remote desktop, etc. etc.  There are dozens of programs pre-installed on windows that could be repaced by something else.  I remember at one time even file managers were popular because the built in file managers were so bad.

    What about FaceTime on iOS or iChat on Mac OSX? I never really understood the Internet Explorer thing either. NO ONE questions whether a smartphone should include a browser or not. Yet it was a big deal when Microsoft started including one in Windows.

    One could even argue that integrating cameras on cellphones had a huge impact on point and shoot camera manufacturers.

    I understand that competition laws are necessary, but cases like this are much more fuzzy…   I guess it’s all a matter of wether you live in a country that rules in your favor or not.

    • Guest

      The rules are different for MS. Though with the way mobile and PCs are converging, that’s starting to look dumber and dumber given that others dominate mobile and units there either do or soon will surpass PCs shortly. But in this specific case Windows used to include VOIP via netmeeting. So arguably they’re just adding it back. But the EU being the EU, I suspect bundling it will either be disallowed, or MS will have to do another shopping list screen of VOIP providers like they have to for browsers.

      I find it suspicious that some small company most of us have probably never heard of is filing a complaint and this late in the process (weeks before the EU dude is set to rule). How much do you want to bet that Google, Apple, or even IBM put them up to it?

    • Maurice McD

      The rules are different? Why are the rules different for Microsoft?
      It’s their OS, their software, so why stop them from doing what they want?

      If I’m the founder of MacDonalds, and I want to introduce a new in-house drink to the franchise, you don’t hear Pepsi/Coke complaining to the EU, so long as I’m not banning the sales of Pepsi/Coke.

    • Guest

      Yes. Because they were convicted on both sides of the Atlantic. Yes, and ask the DOJ and EUC.

      Look, I didn’t make the rules. I even think they were selectively and stupidly applied in both cases. But that’s moot. Here’s what’s important: MS now operates under special sanctions and prohibitions as a result, particularly in the EU.

    • Maurice McD

      @f3043fd94d1bfb60723186dd8c01f423:disqus , it was a rhetorical question.
      My 2 points were:

      1. Microsoft should be free to add/remove software/features to its own os, and
      2. EU/DOJ should apply the same rules to Microsoft, as applied to other companies in the same industry

      If Microsoft is using underhand techniques to squeeze out its competitions (e.g, preventing other messaging software from running on Windows), then set the dogs (EU/DOJ) on them. But adding features to their OWN operating system should not be one of them.

    • http://twitter.com/OldCongress Gamer

      LOL so true, its the same thing as choosing from Coke or Pepsi in MacDonalds if Microsoft were forced to add a list like Internet Explorer/Windows Media.

    • Morgan

      Exactly. If technology dictates that your product is now obsolete then you better evolve or close shop. Did outhouse makers file a complaint once indoor plumbing was created? What about horse drawn carriages once the car was invented. Holding back technology just so some tired company can stay in business is insane. 

    • Anonymous

      It’s simple:
      If enough complaints are filed claiming it’s not good for competition then it is investigated as such and based on the amount of clout both parties have a decision is reached.

      Otherwise if no one complains then it’s simply adding features to your product. 

    • Acftootsie12

      The funny part is that IE is still bundled with Windows. The difference is that you can remove it now. So what’s the big deal if Skype IS bundled with Windows? It doesn’t seem to affect all the bloatware I get on a new computer. How is that any different?

  • Anonymous

    oh…. come on!

  • Jinge

    Some people are going to bother millions of people just because they want to make more money. 
    Because of that it is probably going to stay as an “app” instead to be part of the system.
    For the brother domain, it may have been something, but only because MS was not working on it. But for the VoIP domain it is bullshit. If they want people to take their app, just make a BETTER one.

    Skype fully integrated in Windows would be one of the greatest things MS could do. But if somebody don’t let them do it, they won’t.

    Or… MS buy this one please and shut it off… :)

  • Anonymous

     Dear Italian software company FK OFF PLZ .

    • Guest

      I could be wrong, but I believe they speak Italian over there.

    • xledger

      Microsoft can help ( http://www.microsofttranslator.com):
      “Si prega di società di software italiano caro, vaffanculo”

    • Guest

      molto meglio!

    • Jinge

      I was thinking exactly the same, but I couldn’t write it :D

  • Emi Cyberschreiber

    its stupid since Microsoft hasn’t said anything about skype, skype hasn’t said anything about Windows 8.
    the problema is not companies and people saying lawsuit for something Microsoft has done, the problema is idiots at EU making Microsoft pay alot of money. like when they Microsoft paid alot of millions, more than $700m for not having a versión without media player like if someone couldn’t use whatever player they wanted.

    and how to forget Windows 7 E!

    this is so stupid, if people wants to use skype they will… its not because its in Windows 8 or not. stupid world with stupid idiots. like if alot of people didn’t want this deal, but of course “we are a Italian stupid software company
    noone knows about but we want to be in news and then dont care about what users want” since i bet some dont even care or know Microsoft buy it.

  • Guest

    here’s the background. Messagenet tried to shakedown Skype right after the planned merger was announced. When Skype didn’t go for it, I guess they went to Plan B:

    “Besides asking Microsoft to “unbundle” Skype from Windows, Messagenet is urging European competition authorities to require Microsoft to effectively open Skype’s Internet phone network, which had 124 million regular users in June, to the services of rivals. Messagenet is asking the commission to do this by requiring Microsoft to disclose the confidential computer coding that would enable rival services to connect calls to Skype users.

    Skype’s communication software does not operate with rival services. In May, after Microsoft announced its plans to buy Skype, the managing director of Messagenet, Andrea M. Galli, said he had written to Skype requesting the secret coding that would let the services interconnect, according to a copy of the complaint that Messagenet filed with the commission, and which was seen by the International Herald Tribune.”

    The DOJ decided Google Talk and Apple Facetime were sufficient to maintain competition. But given the history of the EU with MS, and that neither of those is a European company, I wouldn’t optimistic about it passing unmolested.

    • Jinge

      I really don’t understand why they should open it… Do you ask RIM to open its mail service to evrybody? 

    • Guest

      Me neither. But a lot of competitors have wanted Skype to and these clowns obviously thought they could use the threat of the MS merger to force Skype into doing so.

  • Anonymous

    Screw the EU!!!! How dare they interfere with commerce!

  • soulja3

    all I can say is LMFAOO

  • Anonymous

    I want to use my apps on every platform and have them communicate with each other and use IE on iPhone and remove safari … Lets shit on MS until they cant compete anymore.

  • Anonymous

    Is this company also planning to sue Apple for bundling Facetime with it’s OS? What about Messenger, which comes with Windows alreaady? Lync? Communicator? Anyone remember NetMeeting from Win95 days?

    Dear Messagenet, free IP phone calling has been bundled around for years. So why bother even entering this space if you have no strategy other than to complain? Why not focus on developing a better product instead? Maybe then Microsoft will upgrade and give you 8 billion dollars for your company.

  • Anonymous

    Cartoony Skype logo and Mr. Steve Ballmer seem to clash a little, or OK, maybe A LOT

  • Tuxplorer

    I doesn’t matter at all if they bundle it with Windows or not. OEMs will bundle it for them. Just like how about every single OEM bundles Windows Live Essentials with Windows 7.

    • http://twitter.com/OldCongress Gamer

      hahahahahah

  • http://www.perfect-icons.com Adam Chen

    Skype, the best messenger I’m using. I’m also a Yahoo
    Messenger user, but I stop because of hang and hang. The only thing I like on
    YM is there emoticons and web icons. 

  • FAIL

    Ashamed to be italian -.-

  • Justfortherecord

    This is just another attempt by a crappy company trying to block the guys who are strategic and forward thinking from innovating. Companies like this Italian company (also Google) should fall on their face and die. If they cant move with the times and innovate like the rest of the guys out there they should stand aside and let others carry the torch of innovation and customer service.

  • http://www.toolbar-icons.com/index.htm?ref=ch Chris Hubber

    Why they need to block Skype even
    most of people now are using Skype, maybe it’s because MS is selfish, they must
    run other company’s software in all OS and not to block it. Not only to follow their
    rules. Or maybe a simple installation of toolbar icons still on regulations. 

  • http://www.aha-soft.com/stock-icons/high-resolution-app-tab-bar-icons.htm?ref=ch Andrei Johnson

    It would be better if Italian will just shut up.  I can talk with those Italian through Skype. Many will be glad if iPhone development adds Skype for in their new app.

  • probe

    I would only requiere Microsoft to not shutdown Skype functionality in devices which are ALREADY running Skype such as Android, maemo,symbian, other linux… Because buyers of those devices have choosen them counting on skype functionality.

    However it doesn’t matter if Skype comes integrated in windows (x-box,kinetik,windows phone,…) or not.