Salesforce Tries to Block LinkedIn Acquisition

Salesforce Tries to Block LinkedIn Acquisition

Microsoft made waves earlier in the year when it announced it was going to buy LinkedIn. The buy is the largest in the company’s history. At $26.2 billion, the LinkedIn acquisition is the biggest deal Microsoft has ever made. The acquisition was well on its way, the agreement had been signed, but now it looks like something might stand in its way.

Salesforce is attempting to derail the LinkedIn acquisition for Microsoft. The company is trying to persuade the European Union that it should block the deal.

Salesforce Signals the EU’s Competition Authority

Burke Norton is the Chief Legal Officer for Salesforce. He is going to go before the EU’s competition authority and argue that the acquisition should not go ahead. His case states that with buying LinkedIn, Microsoft would also gain control over LinkedIn’s dataset. Burke is claiming that such a situation would be anticompetitive.

In January, Margarethe Vestager, the EU commissioner for competition said that she will be looking at situations where the way a company makes use of data is harmful to the competition. The complaints formulated by Salesforce seem to be aimed directly at those comments.

In a statement released on Thursday, Norton talked about Microsoft’s acquisition of LinkedIn. He said that it “threatens the future of innovation and competition”. LinkedIn has a unique dataset that comprises more than 450 million professionals located in over 200 countries. If Microsoft gains ownership over that dataset, the company will be able to close access to it. By denying competitors access to the data, Microsoft would obtain a competitive advantage, but it would do so unfairly.

The conflict between the two companies is the last in a series of events. The relationship between Salesforce and Microsoft seems to be deteriorating more and more. Earlier this year, both companies were interested in buying LinkedIn. But Microsoft won the bidding war. Since that happened, Salesforce has attacked Microsoft several times. Marc Benioff, who is the CEO of Salesforce, took several shots at Microsoft regarding the deal.

Microsoft Reacts with Their Own Statement

Microsoft didn’t wait long to fire back at Salesforce. Brad Smith is the president of Microsoft and he reacted quickly. He brought attention to the fact that Salesforce dominates the CRM market. In a statement, he said that the deal to acquire LinkedIn has already been cleared in the United States, in Canada and in Brazil. He asserted Microsoft’s commitment to bringing more price competition to the CRM market. Adding that it is Salesforce who is the dominant participant that is charging higher prices at the moment.

The EU could decide to let Microsoft’s acquisition of LinkedIn go ahead. It has the power to block it, but the EU body for competition could decide against it. But even if the EU doesn’t block the deal, the move by Salesforce could have unwanted consequences for Microsoft.

The EU’s competition authority could ask to take a closer look at the deal. With Brussels bureaucracy, that process could take several months. That would bring the negotiations for the acquisition to a halt. As an effect of that, it would take longer for Microsoft and LinkedIn to get the deal done. Microsoft and LinkedIn were hoping to close on the deal by the end of this year. But it looks like Salesforce may have ruined their plans.

 

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