Microsoft-LinkedIn buyout 'likely to gain EU approval'

Several EU flags hoisted outside a building

Microsoft's 21 billion purchase of social network site LinkedIn is likely to gain EU approval, following reported agreement with the European Commission over a number of concessions this week.

Antitrust regulators initially raised concerns that the buyout would give Microsoft an unfair advantage in the market, suffocating rival services.

But Microsoft recently said it would allow LinkedIn rivals to access its Outlook add-ins program, according to Reuters, and, subsequently, that it would allow desktop manufacturers such as Dell and HP to disable LinkedIn and install other social services if they wished.

The latest concessions came after the EU sought feedback from a number of customers and rival companies, according to sources close to the deal, speaking to Reuters.

The deal has drawn the attention of EU antitrust chief Margrethe Vestager, who warned in January that a tougher stance would be taken against tech firms seeking to gain larger market shares. Vestager has since been scrutinising the deal to decide if it should pass EU regulatory rules.

Lawyer Stephen Kinsella, whose firm has advised Microsoft on antitrust issues in the past, believes that raising concerns over deals of this type would "introduce too much uncertainty into the merger review process" and place "unreasonable burden" on competition enforcers, muddying the waters for any future deals.

However US rival bidder Salesforce, which is believed to have given feedback to the EU, argues that the merger is anti-competitive and a threat to innovation. Microsoft has always maintained that the deal is a response to growing competition in the job-hunting market, as Facebook continues to expand into other services.

IT Pro approached Microsoft but the firm declined to comment. The EU Commission has made no official statement but maintains that the investigation is "ongoing", according to an email to IT Pro.

The EU Commission is scheduled to meet on the 6 December, and is likely to agree to the $26 billion buyout, Microsoft's largest ever deal. Regulators in the US, Australia, Canada, Brazil and South Africa have already given the go ahead without concessions.

24/11/2016: Microsoft offers EU concessions over Outlook

Microsoft will allow the integration of rival professional networks into Outlook if it is given permission by the EU to buy LinkedIn, reports have suggested.

Last week, the tech giant said it would allow the social network's rivals to access its Outlook add-ins program, giving them the tools to integrate Outlook APIs into their services. This means some nuggets of information, such as bios, pictures or other data could be pulled into the email application automatically.

Services likely to use this additional feature include German business-professionals network XING, which could integrate its features with Outlook's calendar to display information about attendees.

Following qualms from antitrust regulators who said it would be unfair if Microsoft could bundle products into the Windows OS, the software giant said it would allow manufacturers such as Dell and HP to disable the LinkedIn shortcut on desktops if they so wish.

However, Salesforce, which lost out to Microsoft in the LinkedIn bidding war, still objects to the lack of access LinkedIn's competitors will have to the huge swathes of data it holds.

"We believe this deal raises significant antitrust and data privacy issues," said Burke Norton, Salesforce's chief legal officer.

Microsoft announced it was planning to buy LinkedIn back in June and already has gained approval in the US, Canada, Brazil, and South Africa. although it doesn't need to gain approval in Japan, South Korea or China, it still has significant hurdles to jump over in the EU.

16/11/2016: Microsoft makes concessions to EU over LinkedIn buyout

Microsoft has offered concessions to EU regulators over its $26 billion takeover deal of social network LinkedIn, as the firm faces anti-competition concerns.

The news follows a meeting between the Commission and Microsoft executives last week at which EU antitrust regulators expressed concerns about the deal, according to Reuters.

It is expected that the EU regulators will consider concerns from rival bidders before deciding whether to accept the concessions on the 6 December. If rejected, the EU could demand a more in-depth investigation of Microsoft's largest ever deal.

The news comes after the EU Commission sent questionnaires to third parties in October, to assess any concerns they may have over the Microsoft deal. One question asked whether LinkedIn's data from its 433 million users was unique or if it could be replicated by other services, according to Fortune.

The European Commission's antitrust chief Margrethe Vestager warned in January that although no issues with competition had been found, the regulator would pay close attention to deals among tech firms. Following Microsoft's announcement of a LinkedIn buyout, Vestager has since been examining whether the deal should pass regulatory rules within the EU.

However competition lawyer Stephen Kinsella, whose firm has advised Microsoft on antitrust issues in the past, believes concerns that a buyout of LinkedIn by the tech giant might make it difficult for others to create similar services, would "introduce too much uncertainty into the merger review process".

"Unless there is convincing evidence that a particular data set is genuinely both non-replicable and uncontestable, it would place an unreasonable burden on competition enforcers if they were always obliged to analyse the impact on some rather nebulous 'data market'," said Kinsella, in a blog post.

US rival bidder Salesforce, which lost out to Microsoft, has raised concerns over the LinkedIn deal, arguing that it is anti-competitive and a threat to innovation. Salesforce is considered one of those interested parties providing feedback to the EU Commission.

Microsoft has argued that the deal is simply a response to growing competition from social network Facebook that seeks to expand into the job-hunting market using its vast user base, according to Reuters sources.

LinkedIn, a social media network for professionals, generates yearly revenue of almost $3 billion from job seekers and employers paying subscription fees to connect with others.

Microsoft plans to integrate LinkedIn data into its current family of software packages, to develop features such as a "LinkedIn news feed" that suggests articles based on current projects and "Office suggesting an expert to connect with via LinkedIn to help with a task".

Dale Walker

Dale Walker is the Managing Editor of ITPro, and its sibling sites CloudPro and ChannelPro. Dale has a keen interest in IT regulations, data protection, and cyber security. He spent a number of years reporting for ITPro from numerous domestic and international events, including IBM, Red Hat, Google, and has been a regular reporter for Microsoft's various yearly showcases, including Ignite.