The European Commission is objecting to Microsoft and Time Warner's attempted takeover of digital rights company ContentGuard.

The EC expressed its concerns when the deal was announced in August. At the time it said: "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 Commission has now sent "statements of objection" to the three companies. This does not rule out the deal going ahead, but it suggests the two firms will have to convince the Commission that the takeover won't damage competition. The Commission will seek assurances that competing companies are given fair access to ContentGuard technology, according to the Financial Times.

The Commission is due to rule on the takeover in early January. ®

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