Salesforce Aims To Stop Microsoft's $26.2B Acquisition of LinkedIn
By Shirley Siluk / Top Tech News. Updated September 30, 2016.
Microsoft's planned $26.2 billion acquisition of LinkedIn, announced in June, could enable the company to block competitors' access to LinkedIn's data and global network of professionals, according to rival Salesforce, which is urging European regulators to closely scrutinize the deal.
While regulators in the U.S., Canada and Brazil have already approved the acquisition, authorities in Europe are still reviewing the merger. As a matter of course, the European Commission regularly contacts other companies for comments during such reviews. Salesforce chief legal officer Burke Norton responded yesterday with a statement calling the deal "anticompetitive."
Salesforce had also tried to acquire LinkedIn and even continued to pursue a deal after the Microsoft purchase was announced on June 13. According to a report yesterday in the Wall Street Journal, Salesforce CEO Marc Benioff later emailed LinkedIn executives to say he had been ready to offer a "much higher" price for the company than Microsoft.
'Threatens Future of Innovation'
"Microsoft's proposed acquisition of LinkedIn threatens the future of innovation and competition," Norton said in the statement. "By gaining ownership of LinkedIn's unique dataset of over 450 million professionals in more than 200 countries, Microsoft will be able to deny competitors access to that data, and in doing so obtain an unfair competitive advantage."
In his response, Microsoft president and chief legal officer Brad Smith said, "Salesforce may not be aware, but the deal has already been cleared to close in the United States, Canada, and Brazil. We're committed to continuing to work to bring price competition to a CRM market in which Salesforce is the dominant participant charging customers higher prices today."
Under its review procedures, the European Commission examines proposed mergers to determine if they would "significantly impede effective competition in the EU [European Union]." Based on its findings, the commission can either approve a merger unconditionally, prohibit it or approve it on condition that the companies take certain actions to prevent distortion of competition.
In the case of the Microsoft-LinkedIn deal, "Salesforce believes this raises significant antitrust and data privacy issues that need to be fully scrutinized by competition and data privacy authorities in the United States and in the European Union," Norton said. "We intend to work closely with regulators, lawmakers and other stakeholders to make the case that this merger is anticompetitive."
EU Eyeing Growth of Big Data
Rutgers Law School professor Michael Carrier yesterday told the Wall Street Journal that no technology company merger to date has been blocked by U.S. or EU regulators on anticompetitive grounds. However, European Commissioner for Competition Margrethe Vestager has said the growing use of big data needs to be considered when reviewing proposed mergers.
"To make the best of big data people must be able to trust businesses to protect their privacy," Vestager said in a comment on Twitter yesterday that was retweeted by Salesforce's Benioff.
Yesterday, Benioff also posted a couple of tweets of his own citing comments by Microsoft executive Scott Guthrie that suggested the company could use LinkedIn data for anticompetitive bundling. However, "Guthrie never told attendees Microsoft would be blocking competitors," according to Business Insider. "He only talked about how the data would be integrated into Microsoft's own product."
While Microsoft and Salesforce have been partners on a number of offerings, their partnership has grown testy recently. In May, for instance, Salesforce announced it would be making Amazon Web Services its preferred public cloud provider for international growth. And earlier this month, HP revealed it was switching from Salesforce to Microsoft Dynamics CRM (customer relationship management) product.