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The European Commission on Friday restarted the clock on its in-depth investigation into Microsoft Corp. and Time Warner Inc.’s April 2004 purchase of stakes in Bethesda, Md.-based digital rights manager ContentGuard Inc. Commission spokesman Jonathan Todd said regulators restarted the probe, stopped in December, after receiving additional information it had requested from the firms. “We have now had an opportunity to analyze that information carefully and have just concluded it is sufficient to meet our information requirements,” he said. Regulators opened an in-depth probe into the deal in August to investigate whether it would strengthen Microsoft’s already leading position in the market for digital rights management, used to prevent the illegal copying of music, films and sensitive documents over the Internet. The Commission had said it was worried that under the new owners, ContentGuard may have the incentive and the ability to put Microsoft’s rivals at a competitive disadvantage. Regulators have a new deadline of April 7 to give their verdict on the deal, which did not need to be notified in Washington because it didn’t cross the jurisdictional threshold. Although neither the Commission nor the companies would say anything about the nature of the information request, Todd had said in December that it was unrelated to the addition well after the original deal had been notified of French consumer electronics vendor Thomson SA as an investor. On Friday, he told journalists that the investigation concerns only on the original deal as notified to regulators in July. “The first deal is the subject of an in-depth investigation,” he said, pointing out that the companies would not have been able to sell the shares on to Thomson had it not been for the first deal. “The general rule is that normally you cannot use the shares until such time as the Commission has authorized the transaction,” the spokesman added. A spokesman for Microsoft confirmed that all requested information has been supplied. Concerning Thomson, the spokesman would only say: “We continue to work constructively with the Commission.” Time Warner and Microsoft jointly acquired ContentGuard in April. Although terms of that deal were not disclosed, Xerox Corp. reported an after-tax gain of $83 million from the sale of most of its stake. Xerox spun off ContentGuard in 2000. Thomson joined the mix Nov. 22, three months into the Commission’s in-depth probe. Microsoft has said that the companies had hoped to address regulators’ worries by bringing Thomson in as a third investor. A source close to the companies said the fact that the Commission is looking at the original deal does not put the Thomson deal in jeopardy. Copyright �2005 TDD, LLC. All rights reserved.

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