Microsoft Completes ContentGuard Buy

As expected, the European Commission dropped its review of Microsoft's proposed purchase of digital rights management company ContentGuard and officials announced Tuesday the acquisition was complete. Microsoft, Time Warner and Thomson will each take a one-third stake in the company and appoint two seats on ContentGuard's board.

"We all worked closely and constructively with the European Commission throughout this process and are pleased to reach this resolution," said Brad Smith, Microsoft's General Counsel. "Content Guard will help promote broader access to DRM technologies that will benefit businesses and consumers in Europe and around the world."

ContentGuard offers technology for protecting digital content and has created eXtensible rights Markup Language (XrML), which it is pushing for industry adoption. The company, which was spawned from parent Xerox, cites numerous customers including Sony.

Originally, only Microsoft and Time Warner were involved in the buyout, which led to concerns from European regulators that Microsoft's control of ContentGuard will broaden its dominance in the digital media space. The two companies responded by offering equal interest to French electronics manufacturer Thomson.

With Thomson on board, the European Commission lacked the authority necessary to review the deal. However, the EU will continue to monitor Microsoft's involvement in the DRM market.

The new owners of ContentGuard promise to continue work on the company's intellectual property and promote DRM compatibility across all electronic devices.

"We are delighted to join forces with Microsoft and Time Warner to enhance ContentGuard's efforts in the market to drive DRM interoperability," said Joe Berchtold, President of Thomson's Electronic Content Delivery Services.