Marketing Clouds

Microsoft’s LinkedIn Deal: Salesforce’s Fails to Block; EU Approves the Acquisition, But With Certain “Conditions”

The latest update on Microsoft’s LinkedIn deal can shift the paradigm of marketing technology towards social connectivity in the near future. After months of waiting, Microsoft can finally add the largest professional social networking site, LinkedIn, to its bundle of acquisitions. The European Union (EU) approved the $26 billion deal after the tech-giant agreed to offer concessions to global users.

Before the final update on Microsoft’s LinkedIn deal, the acquisition had to earn approvals from regulatory authorities from Brazil, Canada, South Africa and the US. Microsoft pressed a statement announcing the receipt of approvals from all the regulators.

Brad Smith, President and Chief Legal Officer (CLO) of Microsoft said about the EU approval,

As part of our discussions with the European Commission, we formalized several commitments regarding Microsoft’s support for third-party professional social networking services.

In June 2016, Microsoft and LinkedIn announced the signing of a definitive acquisition agreement pegged at $26.2 Billion. The technology titian acquired LinkedIn for $196 per share, turning the deal into one of the biggest acquisitions made by Microsoft in recent times.

Why did the deal come under the scanner?

Microsoft was not alone in the race to grab this deal with LinkedIn. Salesforce was there too, looking to acquire the most valuable professional networking site in the world. However, Microsoft outbid the competitors with fair margin. Meanwhile, Salesforce had raised issues likely to crop up in the way data would be flowing to Microsoft, giving the latter an unfair advantage over its rivals.

In the past, Microsoft has been penalized for its anti-competitive practices that highlighted possible unfair advantages of it’s dominant position in the market. The EU has repeatedly fined Microsoft since 2004 for various reasons. Hence, EU acknowledged Salesforce.com’s request and held back the deal from finalizing in Europe.

The Conditions Laid by EU

What the EU asked Microsoft to ensure before legitimizing the acquisition:

Non-LinkedIn users can continue to use Microsoft Office and other products without any limitations. The other professional networking sites can access MS Office applications and cloud-computing services even if they are not on LinkedIn, or don’t have a shortcut on their desktop or devices.

“We also won’t use Windows itself to prompt users to install a LinkedIn application, although it can remain available in the Windows Store and be promoted in other ways,” Smith said

The agreed conditions will be applicable inside the European Union for five years.  While Jeff Wiener will continue to hold the post of CEO of LinkedIn, he will report to CEO of Microsoft, Satya Nadella.

The Microsoft’s LinkedIn deal is expected to be closed in some days before 2016 ends.

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