The European Commission plans to send official objections to a proposed joint takeover of ContentGuard Holdings by Microsoft and Time Warner, according to Reuters.

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 company was spun off from Xerox, which plans to retain a small investment.

Microsoft has long been interested in digital rights management and recently revamped its DRM technology, dubbed "Janus," which enables content to be delivered in a subscription model and to portable devices. America Online, a division of by Time Warner, was one of the initial backers of Microsoft's technology.

Ownership of ContentGuard and XrML could prove critical to Microsoft in its efforts to establish the company's DRM solution as industry standard - and that is what concerns the EU. Consumer giant Sony is already a licensee of ContentGuard, and the European Commission says the deal could bolster Microsoft's dominance and lead to vertical integration of Microsoft in other markets.

Microsoft and Time Warner asked the European Commission for approval of the deal earlier this year, with a final resolution expected by January 6, 2005.