Brussels, 15/03/2005 (Agence Europe) - After the purchase of 33% of the company ContentGuard by the French company Thomson, the Commission has decided to close the inquiry into plans by Time Warner and Microsoft to take joint control of the American DRM systems (Digital Rights Management Systems). The fact that ContentGuard's capital has been opened up to Thomson, which was announced in November 2004 but has only been effective since 11 March, has led to changes in the conditions of the operations planned by the two American companies and the new division of the shares of ContentGuard (a third per shareholder) means that neither of the two will have control. Time Warner's and Microsoft's initial plans having been cancelled, the Commission will not continue with the proceedings it had started.
ContentGuard, one of the inventors of DRM technology, is active on the market for the development and sales of intellectual property rights and has an impressive portfolio. In August 2004, the Commission expressed its doubts at plans by Microsoft and Time Warner to acquire 48% of the voting rights of ContentGuard, as they were concerned that this would fuel the quasi-monopoly held by Microsoft in the operating systems market. The Commission's investigations aimed mainly to check whether Microsoft could manage its portfolio to the detriment of its competitors (EUROPE of 26 August). Further to changes made to the governance rules of ContentGuard and the involvement of Thomson, none of the three shareholders will have a controlling position over ContentGuard, the Commission concluded, adding that Microsoft will therefore not be able to impose the policy for issuing licences on the DRM solutions market that that there are no grounds for continuing with the inquiry. DRM solutions, which ensure the confidentiality of content, were originally designed to prevent audio-digital piracy, but are likely to be used for more and more applications. Given the potential (mobile telephony, word processing software etc), the Commission said in a press release that it would continue to “follow closely the development of the DRM solutions sector and, if necessary, reserve the right to take measures under Community rules on cartels and abuses of dominant position”.