Cisco challenges Microsoft takeover of Skype in EU

Networking company Cisco said Wednesday that it is challenging Microsoft's $8.5 billion takeover of Skype at the European Union's top court to ensure Microsoft won't block other video conferencing services.

Microsoft completed the deal in October shortly after the European Commission, the EU's competition regulator, cleared the takeover. Microsoft Corp. hopes that owning Skype will allow it to better compete with other tech giants including Apple Inc. or Google Inc.

But for Cisco Systems Inc., the world's largest maker of computer networking equipment, the Skype deal creates a serious challenger to its video conferencing systems.

"Cisco does not oppose the merger, but believes the European Commission should have placed conditions that would ensure greater standards-based interoperability," Marthin De Beer, the head of Cisco's video conferencing division, wrote in a blog post.

Video conferencing equipment is a relatively small part of Cisco's overall sales, but it's growing rapidly. Cisco's latest major acquisition was of Tandberg, a Norwegian maker of video conferencing equipment. Cisco spent $3.4 billion for the company in 2010.