Microsoft is under fire from the European Commission for the second time this year, this time over its grip on the UK cable TV market.
Officials in Brussels today launched a full investigation into Microsoft's proposed acquisition of 29.9 per cent of UK cable operator, Telewest.
The EC is concerned that if Microsoft put its software on Telewest's set-top boxes, it would gain monopoly control over set-top box software in these areas. This could lock out other software developers and content providers.
Earlier this week, the EC set Microsoft a deadline of 15 April to defend its accusations that Windows 2000 is a menace to competition in Europe's computer market. The EC investigation, launched in February, followed similar action in the US by the Department of Justice.
"The Commission has raised serious doubts as to the compatibility of the proposed acquisition of a joint controlling interest of Microsoft in Telewest because of its impact on competition in the market for software for digital set-top boxes, and because of its possibility to strengthen Telewest's existing dominant position as an exclusive supplier of cable services to consumers within its franchise area," the Commission said in a statement.
"The Commission must appraise the interests of the intermediate and ultimate consumers, and must ensure that technology is not used to restrict the choice of services which consumers can access."
"The Commission will make a detailed assessment of the impact of the transaction on competition conditions in various areas of the digital cable industry. More in particular, the focus area of the investigation will be the provision of software for digital set-top boxes in the UK and its impact for the choice of the British cable subscribers," the statement added.
Microsoft announced its intention to acquire 29.9 per cent of Telewest last May as part of a complex transaction that saw the Redmond company take a $5bn stake in US long distance operator AT&T. Microsoft already owns five per cent of NTL, another UK cable operator.
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