Microsoft’s acquisition of LinkedIn gets EC approval - Mobile World Live

Microsoft’s acquisition of LinkedIn gets EC approval

07 DEC 2016

Microsoft was forced to address the European Commission’s concerns about bundling LinkedIn with its products, in return for approval of the $26 billion takeover.

Of particular concern to the EC was, post-merger, how Microsoft could use its strong market position in operating systems via Windows, as well as productivity software (Outlook, Word, Excel and Powerpoint), to strengthen LinkedIn’s position against its rivals.

The commission said it was nervous of Microsoft pre-installing the professional social network on all Windows PCs, as well as integrating it into Microsoft Office and combining the two companies’ user databases.

This development could have been reinforced by shutting out LinkedIn’s competitors from access to Microsoft’s APIs, which they need to interoperate with its products and to access user data stored in the Microsoft cloud, the commission said.

The EC was concerned that these measures would mean LinkedIn getting bigger, so making it harder for new players to provide competing services.  In addition, it could have tipped the market towards LinkeIn in those markets, such as Austria, Germany and Poland, where rivals currently operate.

The commitments made by Microsoft to the commission include ensuring that PC manufacturers and distributors would be free not to install LinkedIn on Windows, and allow users to remove LinkedIn if pre-installed.

In addition, it must allow competing professional networks to maintain current levels of interoperability with Microsoft Office through the Office add-in programme and APIs.

Finally, Microsoft agreed to allow competing professional social networks access to Microsoft Graph, a gateway for software developers. Microsoft Graph is used to build applications and services that can, subject to user consent, access data stored in the Microsoft cloud, such as contact information, calendar data and emails.

In a recent speech, EU competition commissioner Margrethe Vestager highlighted how acquiring user data, or even data from objects such as connected cars, can be central to M&A activity, and hence within her remit.  The Microsoft/LinkedIn deal provides a prime example of such an acquisition and, consequently, of how the EC will scrutinise them.

Salesforce, an unsuccessful rival bidder for LinkedIn, earlier urged the EC to dig further into Microsoft’s proposed acquisition. CEO Marc Benioff pressed the Federal Trade Commission (FTC) in the US to investigate the deal, but the agency declined.

Benioff argued the acquisition is anticompetitive because Microsoft can restrict access to LinkedIn’s data, making life difficult for rivals (including Salesforce).

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Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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