Both Microsoft and Time Warner have decided to not proceed with a hearing over the takeover of digital rights management software company ContentGuard.

Under EU antitrust laws, a company has the right to request a hearing in front of the Commission to plead their case as to why regulators should approve a deal. The Commission will then consult with the various authorities of member nations and decides whether to approve or deny the merger or takeover.

ContentGuard offers technology to prevent copying of protected files and has created eXtensible rights Markup Language (XrML), which it is pushing for industry adoption.

The EU's initial concern stemmed from whether Microsoft's control of ContentGuard will broaden its dominance in the digital media space, and allow Redmond to vertically integrate into other markets.

In February, the EU announced it would reopen its review of the original deal, despite the addition of French electronics company Thomson in November. Microsoft hoped Thomson joining the buyout would alleviate concerns from European regulators.

According to people close to the case, the latest move is a sign that the companies expect the European Union Commission to approve the deal.