EU Breakthrough Looks Imminent in Microsoft-LinkedIn Deal
|Microsoft CEO Satya Nadella with LinkedIn chief Jeff Weiner - img: BBC|
Without the assent of the European Commission, Microsoft and LinkedIn would be unable to freely roll-out their joint operations in member states. Microsoft alone has already suffered $2.3bn worth of EU fines over the past ten years, according to Reuters. To operate unimpeded in the EU (which is home to many customers of both Microsoft and LinkedIn), Microsoft reportedly made two concessions last week in an effort to address the central point of contention: whether the takeover would make it unjustifiably easy for LinkedIn to outpace its rivals.
The first concession, Reuters claims, will see Microsoft 'allow LinkedIn's rivals access to its software.' This means rival professional networking sites like Jobcase would still be allowed to use, or continue to use, things like the APIs for Microsoft Outlook (which allow multiple programs to talk to each other on a single computer).
The second concession will 'give hardware makers the option of installing other services.' This means that computer manufacturers like HP and Dell, whose products (being 'PCs') run Windows, would be allowed to disable the LinkedIn shortcut on the desktops of the computers they produce (a shortcut which could be default in a Windows OS after the acquisition). What's more, they could even install in its place third-party apps for rival companies like Jobcase.
Although these concessions seem to have been enough to swing the EU's favour, they don't seem enough to silence critics of the deal. Burke Norton, Chief Legal Officer of San Francisco-based cloud computing company Salesforce, has led the charge of criticism of the deal over the past few months: albeit with a somewhat different focal point to those in the above concessions.
First, we should mention: Salesforce ended up as Microsoft's biggest rival in securing the LinkedIn takeover back in June, meaning it's hardly presumptuous to suspect ulterior motives lurk behind the company's ostensible concern for healthy European competition. Nonetheless, we would do well to consider whether their claims hold water.
Salesforce's key arguments regarding competitiveness have centred around user data, rather than software and hardware issues: specifically, if Microsoft held the vast amounts of user data which LinkedIn currently has, then it could, as the new gatekeeper, pull up the drawbridge. In that scenario, Microsoft could reap all the benefits of the LinkedIn data, with outsiders (including LinkedIn's rivals) being denied access to it. That, Salesforce has claimed, could ultimately squash every professional networking site except LinkedIn, whose competitors often rely on the LinkedIn data pool being directly accessible.
The Telegraph reported in September that such concerns were 'gaining traction with some European officials.'
However, it seems counter-arguments have ended up prevailing as far as data is concerned. Most important, it seems, is the argument that the extent to which Microsoft could curtail competition by wielding user data is less extreme than the extent to which other big data-gatherers like Facebook are already allowed by the European Commission to curtail competition elsewhere.
It is true that EU competition commissioner Margrethe Vestager has made various moves to crack-down on the use of such data being gathered by the likes of Facebook from a consumer rights perspective (in an interesting argument which regards user data as a form of currency, the exchange of which merits the enforcement of consumer rights regulations); but from an antitrust, pro-competition stance, the Microsoft takeover of LinkedIn is indeed less exceptional than Salesforce would have us believe.
And that, ultimately, is why the EU is likely to give the deal the go-ahead. The concessions made by Microsoft last week still do not allow outsiders direct access to the LinkedIn data; but they do enough to quell the EU's concerns around the competitiveness of rival services. The question of whether the Microsoft-LinkedIn competition-curtailing would be just one bad thing to add to a list of many other bad things, some of which are worse, is perhaps a debate for another day. For now, at least, we can say with fair confidence that, with a final EU announcement expected by 6 December, the takeover of LinkedIn by this Californian behemoth is most likely going to be approved.
James has a Bachelor’s degree in History and wrote his dissertation on beef and protest. His heroes list ranges from Adele to Noam Chomsky: inspirations he’ll be invoking next year when he begins a Master’s degree in London. Follow him @Songbird_James
EU Breakthrough Looks Imminent in Microsoft-LinkedIn Deal Reviewed by James Stannard on Tuesday, November 29, 2016 Rating: