ContentGuard Acquisition Opposed By Antitrust Regulators

Gretchen Gallen
NEW YORK – Microsoft Corp. and Time Warner found themselves in the antitrust hot seat Friday after the European Commission announced plans to file formal charges against both corporate giants for alleged violations related to the joint acquisition of ContentGuard Holdings, a Digital Rights Management company.

According to reports, the European Commission plans to send formal charges to Microsoft and Time Warner next week, listing objections to their takeover of ContentGuard from previous owner Xerox, which will retain a small stake in the company once the purchase is finalized.

The antitrust allegations from the European Commission, which is the governing body that oversees companies doing a large portion of business in Europe, stem from potential market domination by Microsoft and Time Warner over DRM products. The Commission has also expressed concerns over how Microsoft would eventually integrate ContentGuard technology into its existing products.

Earlier this year, the two companies entered into an agreement to share equal ownership of ContentGuard, which makes technology to protect digital files from being cracked. Sony is reportedly one of ContentGuard's licensees.

Bethesda, Md.-based ContentGuard controls a portfolio of patented technologies designed to protect the delivery of content and services over a variety of different mediums. The company has also thrown its weight behind the adoption of MPEG REL as the industry standard for Digital Rights Language.

The deadline for the European Commission's decision was originally set for Aug. 25, but was pushed back on several occasions for an extended review of the acquisition, regulators said.