Antitrust Law Daily Microsoft takeover of GitHub sails through European Commission review without issue
Friday, October 19, 2018

Microsoft takeover of GitHub sails through European Commission review without issue

By E. Darius Sturmer, J.D.

The European Commission (EC) today approved, under the EU Merger Regulation, Microsoft Corporation’s acquisition of GitHub, a U.S.-based company that creates and supplies software development tools for corporations. The parties notified the EC of the proposed merger on September 14.

According to the EC, the Phase I investigation of the transaction concluded that it posed no competitive concerns in any of the relevant markets for tools and cloud services. The agency therefore cleared the case without condition.

In announcing the outcome of its investigation, the EC noted that GitHub and Microsoft both provide access to platforms for software development that allow developers to collaborate on source code and both provide code editors and integrated development environments. However, the EC said, the combination of the companies’ activities on these markets would not harm competition in either "because the merged entity would continue to face significant competition from other players on both markets."

The inquiry additionally assessed whether there would be a risk of weakened competition, if Microsoft were to leverage the popularity of GitHub's software development platform to boost its own sales of DevOps tools and cloud services, the agency said. In particular, it looked at whether Microsoft would have the ability and incentive to further integrate its own DevOps tools and cloud services with GitHub while limiting integration with third parties' DevOps tools and cloud services. But the market investigation confirmed that Microsoft would not have the market power to undermine the open nature of GitHub to the detriment of competing DevOps tools and cloud services. Nor would it have any incentive to do so; any such attempt "would reduce the value of GitHub for developers, who are willing and able to switch to other platforms."

Microsoft announced the planned acquisition of GitHub for $7.5 billion in June. At that time, Microsoft said that the two companies "will empower developers to achieve more at every stage of the development lifecycle, accelerate enterprise use of GitHub, and bring Microsoft’s developer tools and services to new audiences."

Companies: GitHub; Microsoft Corp.

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