Dec 2, 2020 - Technology

Salesforce's Slack deal resets the tech antitrust debate

Illustration of mismatched slack logo

Illustration: Aïda Amer/Axios

Salesforce’s acquisition of work chat company Slack for $28 billion to better compete with Microsoft underscores just how hard it is for tech companies big and small to challenge today's dominant tech giants.

Flashback: Less than a year ago, Justice Dept. assistant attorney general for antitrust Makan Delrahim touted Slack’s trajectory from small VC-backed startup to publicly-traded software company as an illustration of a healthy, well-functioning market in which it's possible for newcomers to prosper independently. 

  • “Slack’s ability to IPO and provide an independent source of competition to other technology platforms is an example of a venture capital system working to create a healthy economy,” Delrahim said during a DoJ workshop at Stanford University focused on venture capital and antitrust. 

Yes, but: Slack's decision to sell to Salesforce came as the upstart business-messaging provider faced an uphill battle against Microsoft, which has built up its Teams product and bundled it with its other business offerings.

The other side: Another way to view the Salesforce/Slack combination is to see it as an example of companies using mergers and acquisitions to create competition rather than to squelch it. A smart deal can find a combination that challenges powerful rivals.

Of course, that depends on how well the combination is executed.

  • In 2012, Microsoft acquired a Slack predecessor named Yammer. 
  • Though Yammer initially fared well, Slack eclipsed it in the marketplace.
  • By the time Microsoft set out to challenge Slack, it decided to build a new product rather than promote Yammer (or, for that matter, Skype, another previous Microsoft acquisition that also has a messaging function).

Go deeper: VCs push back on DOJ antitrust concerns

Go deeper