On 29 March 2010 the European Commission cleared (at phase I of the investigation) the proposed acquisition of Tandberg by Cisco Systems subject to the fulfilment of a structural remedy to open up part of Cisco's technology.
Cisco Systems is a global company based out of the US active in the development and sale of networking products, particularly the design, manufacturing and sale of Internet Protocol-based networking products for video communications solutions systems.
Cisco notified the Commission, on 8 February 2010, of its intention to acquire Tandberg, a vendor of video-conferencing products headquartered out of Norway and the US. Like Cisco, Tandberg operates in the video-conferencing solutions market.
The Commission identified concerns in relation to the market referred to as "telepresence" (high-end video-conferencing products and solutions intended to simulate face-to-face meetings), in which the merged entity would have a high market share. In addition, interoperability issues between the merged parties' solutions and those of competitors were identified.
Cisco offered various remedies to address the Commission's concerns, which the Commission accepted after market testing. In particular, Cisco is to divest, to an independent industry body, ownership of its proprietary Telepresence Interoperability Protocol (a protocol used to communicate between Cisco telepresence products and third party video-conferencing products). This should ensure interoperability with Cisco solutions and allow other vendors to participate in the development and update of the protocol. It should also facilitate market entry and expansion irrespective of the location of the competitors or the customers.
Although Cisco had already agreed this year to offer its Telepresence Interoperability Protocol royalty-free to others in the industry, the formal commitment to divest the technology is intended to make sure there are no remaining restrictions on its use.
Ultimately, the remedy aims to ensure an independent industry-based proposal for a standard protocol, which will then be submitted to a standard setting organisation.
The Commission conducted its investigation in close co-operation with the US Department of Justice, which announced its clearance of the acquisition on the same day as the Commission, relying on the evolving nature of the video-conferencing market and Cisco's commitment to the Commission for its clearance. Although the deal may now close, the transaction is understood to be subject to ongoing regulatory review in Brazil.
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