Out-Law / Your Daily Need-To-Know

Following a European Commission investigation, Microsoft has agreed to modify its relationship with two partner companies, in order not to exercise undue influence over their choice of set-top box technology.

Last year, Microsoft agreed to reduce its joint controlling position in UK cable TV operator Telewest to a simple minority interest following an investigation by the Commission. The Commission then decided to examine Microsoft's strategic investments in other leading European broadband cable operators: Dutch-based UPC, NTL of Britain and TV Cabo of Portugal. In two of these companies (UPC and NTL), the investment was accompanied by the setting up of a joint Technology Board that made binding recommendations as to the technology decisions of the cable company.

In order to avoid discussions on the status and powers of these Technology Boards, Microsoft agreed with one cable operator to abolish the Technology Board completely and with the other cable operator to change the Technology Board into an Industry Technology Forum that will be equally open for competing suppliers of set-top box technology.

The Commission announced yesterday that it is happy with these modifications and considers them satisfactory to end the current investigation into the involvement of Microsoft in the emerging digital cable markets in Europe. The Commission added that it does not want to prevent these companies from buying the new Microsoft products for digital interactive television, but wants to make sure that new technologies are brought to the consumers on fair and equal terms.

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