Microsoft has agreed to limit its investment in UK cable operator Telewest following pressure from the European Commission (EC) to relinquish its joint control with US company Liberty Media.
The Commission said Microsoft had abandoned plans to take a controlling stake in Telewest following a four-month investigation into the deal. The EC was concerned that the deal would reduce competition in the digital cable industry by enabling Microsoft to influence technology decisions, such as the supply of software for set-top boxes, in the UK.
"Since the consumer cannot decide on the software and the digital services that are delivered to their homes, it is important that cable operators be able to make technology decisions on the basis of fair and equal competition," the EC said in a statement.
However, as a result of Microsoft's announcement last week that it would keep a 23.7 per cent stake in Telewest but break all structural links with Liberty Media, the EC said it would not take any further action over the deal.
Microsoft said it has worked closely with the Commission over the deal and is happy with the outcome. "We are pleased that the investment can go ahead," said a spokeswoman. "The partnership with Telewest will accelerate the development of broadband networks and services. We will now work on finalising the deal."
Telewest said it welcomes the fact that Microsoft will now be able to become a major investor in the company. "I am very pleased that this situation has now been resolved," said Telewest chairman Cob Stenham. "Telewest will greatly benefit from Microsoft's support as a major shareholder in our business."
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