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DOJ info request on Salesforce, Slack deal a peek at antitrust concerns, expert says


Dive Brief:

  • The Department of Justice is seeking more information about Salesforce’s proposed $27.7 billion acquisition of Slack, according to an SEC filing Tuesday. The agency’s antitrust division did not share specifics about what information was requested. 

  • While the theme for big tech antitrust enforcement tends to deal with matters such as privacy or misinformation, the DOJ’s review here seems to be more related to antitrust concerns, said Sarah Oh, senior fellow at the Technology Policy Institute. 

  • “You don’t have any of the elements that make for headlines,” said Oh. “You don’t have politics, you don’t really have advertising. This is actually kind of a more clear cut tech antitrust inquiry.”

Dive Insight:

Usually, a small fraction of deals subject to the closer review under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 receive such a request. In FY 2019, just 61 out of 2,030 transactions received a second request for information, according to Federal Trade Commission data

After announcing the acquisition, Salesforce and Slack outlined how the platforms would complement each other. Slack pitched itself as a layer between the conversational and work processes. Salesforce viewed the addition of Slack as a way to expand its appeal across the organizations, as both companies compete against Microsoft’s broad enterprise adoption.

In its evaluation, the DOJ must determine whether a future merger will result in anti-competitive behavior, as opposed to an investigation after a merger has occurred. Slack and Salesforce “have and will continue to cooperate fully with the DOJ in its review,” according to the filing. 

“It is a little bit of a predictive exercise,” said Oh. “Other kinds of enforcement actions happen after the fact, like you’ve amassed all this monopoly power and you’re … creating injury. But this is actually preventative.”

Slack has been vocal about competition in the tech space before. The company introduced an antitrust claim against Microsoft last year in the European Union, an action that could come into play in the DOJ review. Slack called out Microsoft for the “illegal and anti-competitive practice of abusing its market dominance,” according to a statement from Slack

As part of its formal complaint before the EU, Slack likely laid out what’s known as a “market theory,” describing where chat and applications fit into workflows. The definition of the market will inform the DOJ on its own determination of which efficiencies will come from the deal, Oh said.

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“We’re happy to work with regulators to ensure that they have a complete understanding of this transaction and why we believe it will be good for competition,” said Jonathan Prince, VP, communications and policy at Slack, in an email. “We are confident that it will be approved when that process is completed.” Salesforce did not respond to requests for comment by publication time.



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