Australian watchdog content with Salesforce's $27.7b Slack acquisition

The ACCC concluded it is unlikely that the acquisition would result in Salesforce preventing Slack's rivals from competing effectively. Similarly, the ACCC did not consider it likely that Salesforce's rivals would be competitively disadvantaged.

The Australian Competition and Consumer Commission (ACCC) has announced it will not stand in the way of the $27.7 billion sale of Slack to tech giant Salesforce.

The companies announced the deal in December and the Australian watchdog commenced an informal review under the Informal Merger Review Process Guidelines in March.

Read more: Salesforce acquires Slack for $27.7 billion in its largest acquisition ever: Here's the plan

"The ACCC concluded that the proposed acquisition is unlikely to have the effect or likely effect of substantially lessening competition," it declared.

"Salesforce's CRM solution and Slack's team collaboration solution are differentiated and complementary offerings. The ACCC notes that users of CRM solutions value the ability to integrate their solution with third party software and applications, and the same is true for users of team collaboration solutions."

The ACCC considered whether the proposed acquisition would give Salesforce the ability and incentive to engage in bundling techniques, or restrict Slack's rivals' team collaboration solutions from integrating with Salesforce's CRM solution, to the detriment of Slack's rivals.

The competition watchdog found that Salesforce may have the ability to engage in such conduct, but that it was unlikely to have the incentive to do so.

It also considered whether the proposed acquisition would give Salesforce the ability and incentive to engage in bundling techniques, or restrict Salesforce's rivals' CRM solutions from integrating with Slack's team collaboration solution, to the detriment of Salesforce's rivals.

Likewise, the ACCC determined that Salesforce is unlikely to have the ability to engage in such conduct, as Slack's team collaboration solution is not a "must have" and Australian businesses generally use multiple team collaboration solutions. 

"Salesforce and Slack mostly supply different software with distinct purposes, so there is minimal direct competitive overlap between them," ACCC chair Rod Sims added.

Sims said throughout the ACCC's investigation, most interested parties raised no concerns.

"Market participants said that if Salesforce engaged in anti-competitive bundling or foreclosure conduct, customers could switch to alternative CRM solutions, including global enterprise software companies such as Microsoft, Oracle, SAP, and Adobe. Similarly, customers could switch to alternative team collaboration solutions, such as Microsoft Teams," Sims said.

"We consider, due to commercial and reputational risks, that Salesforce would be unlikely to disadvantage competitors by degrading interoperability between Salesforce's CRM solution and competitors' team collaboration solutions, or between Slack's team collaboration solution and competitors' CRM solutions."

Speaking previously, Sims said any work attempting to essentially structurally separate large tech giants, which could potentially undo many of the acquisitions undertaken over the last few years, would be left to the ACCC's counterparts in the United States.

The call to effectively break up Amazon, Apple, Facebook, and Google came at the conclusion of the United States House Judiciary Antitrust Subcommittee's probe into the four digital giants, with its 450-page report in October making a slate of recommendations, including those it said would strengthen antitrust laws and restore competition in the digital economy.

Sims declared these calls were "very much an issue for the US to deal with".

"I certainly met with Representative Cicilline, who was the chair of that report, when I was last in Washington … we ourselves are in touch with all the major international competition agencies and regulators on these issues," Sims told the House Standing Committee on Economics in February.

"Breaking them up is more an issue for the US, but you just don't know -- personally, I wouldn't want that to distract from attention on all the other problems that we should be dealing with now, and it could be a big distraction if that's all we're focused on, we're [going to] miss a hell of a lot else."

The ACCC is currently engaged in a stoush with Google over its proposed acquisition of FitBit.

MORE FROM THE ACCC

Australia to leave digital giant break up work in the hands of the United States

The ACCC will instead focus on the more local digital giant problems, such as the News Media Bargaining Code and the new adtech inquiry.

Prime Minister declares Australians should be in charge, not tech giants

Told ZDNet the government will 'always step up' when Australia's sovereignty is being compromised or challenged.

Australia, UK, Germany team up to stop big tech's monopoly from soaring

Competition regulators from Australia, the UK, and Germany are working together to support an 'effective' mergers regime that seeks to prevent companies from gaining market power through acquisitions.