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Networking giant Cisco's $5bn takeover of pay-TV software maker NDS was approved by Brussels' competition officials today.

The European Commission said its "investigation confirmed that the merged entity would continue to face competition from a number of strong competitors and that customers, namely pay-TV providers, would continue to have alternative suppliers in all markets concerned".

Antitrust officials said Cisco's proposed acquisition would not harm competition in the pay-TV technical services market. They examined the availability of hardware components, such as set-top boxes, and software components including piracy-tussling digital rights management and conditional access systems.

"There are only limited overlaps between the parties' activities in relation to each of these hardware and software products at the worldwide level and these overlaps are even smaller in the European Economic Area," the commission concluded.

It warned that "vertical and conglomerate relations" did exist between NDS's pay-TV software development and Cisco's set-top boxes, but the EC added:

[T]he commission's investigation confirmed that the merged entity would not have market power in the relevant markets and would therefore not have the ability nor the incentive to raise the costs for its competitors in set-top-box or pay-TV software or to exclude them through bundled offers of the different components of pay-TV technical services.

Cisco's planned merger of NDS, which counts Sky and Canal in Europe and Comcast in the US among its customers, would be the biggest acquisition the networking company has ever made. It previously coughed up $3bn for WebEx and a further $3bn for video-conferencing outfit Tandberg. ®

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