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Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

October 7, 2011 at 9:23 AM

EU approves Microsoft’s purchase of Skype

The European Union has approved Microsoft’s proposed acquisition of Skype, clearing a big hurdle toward the software giant’s purchase of the Internet phone company.

The European Commission said in a news release that the acquisition would not “significantly impede effective competition” in Europe.

Here’s more from that news release:

“The European Commission has cleared under the EU Merger Regulation the proposed acquisition of the Internet voice and video communication provider Skype by Microsoft Corporation because the deal would not significantly impede effective competition in the European Economic Area (EEA) 1 or any substantial part of it.

In the area of consumer communications, the investigation found that the parties’ activities mainly overlap for video communications, where Microsoft is active through its Windows Live Messenger. However, the Commission considers that there are no competition concerns in this growing market where numerous players, including Google, are present.

For enterprise communications, the investigation confirmed that Skype has a limited market presence for these products and does not compete directly with Microsoft’s enterprise communication product Lync, which is used mostly by large enterprises.”

Brad Smith, Microsoft’s general counsel and executive vice president, said in a statement:

“We’re pleased that the European Commission has approved Microsoft’s acquisition of Skype. This is an important milestone, as we’ve now received clearance from both the United States and the European Union. We look forward to completing soon the final steps needed to close the acquisition, bringing together the employees of Microsoft and Skype, and creating new opportunities for people to communicate and collaborate around the world.”

Microsoft announced its planned $8.5 billion purchase of Skype in May — the largest acquisition for the software company. The proposed purchase, which must get regulatory clearance from several countries/regions before it can be finalized, won the approval of the U.S. Justice Department in June.

About 170 million people use Skype for voice and video calls and text messages over the Internet, either for free or at rates cheaper than most landline and wireless calls.

The two companies envision Skype becoming a new business division within Microsoft, with Skype CEO Tony Bates assuming the title of president of the Microsoft Skype Division.

They plan to have Skype supporting Microsoft devices like Xbox, Kinect, Windows Phone and other Windows devices, and Microsoft integrating Skype with its services such as Lync, Outlook and Xbox Live.

Microsoft has said it would invest in and support Skype clients on non-Microsoft platforms.

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