The European Commission will, after all, launch a probe of the deal between Microsoft and Time Warner to take joint ownership of a US DRM company, ContentGuard. The probe is warranted, the Commission announced in a press conference today, because the deal could lead to Microsoft extending its monopoly in operating systems to the locks and keys for the digital distribution of books, music, movies and third party software.

"It appears to the Commission that the transaction might possibly create or strengthen a dominant position by Microsoft in the market for Digital Right Management (DRM) solutions," the EC's competition office said in a canned statement.

ContentGuard's technology was devised at Xerox, and in April, Time Warner bought most of Xerox's share, while Redmond increased its holding in the company. The two are effectively joint owners. Sony is also a licensee.

The investigation must report by 6 January next year. ®

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