04 July 2000

The move by Microsoft to seize joint control with Liberty Media of UK cable network Telewest [WAMN, 27-Jun-00] received a serious setback following yesterday’s publication of a draft decision by the European Commission to block the deal.

The draft cites concerns that the software colossus could corner the market for digital television software. Microsoft, eager to shoehorn its WebTV product into the European market, already has a strategic investment in Telewest’s larger British-based rival NTL, as well as United Pan-Europe Communications in the Netherlands.

The EC’s final decision on the $3 billion (€3.14bn) Telewest deal is expected later this month – earlier than the review deadline of 4 August. Microsoft claims its investment is part of a "learning experience" in digital TV, a medium predicted to become the dominant means of mass-market access to the internet.

Microsoft declined to comment on the EC’s draft decision, save that it remains committed to the deal and will continue to work with the commission to remove any remaining concerns.

News source: Wall Street Journal