Microsoft acquisition of LinkedIn raises privacy questions

Microsoft going forward will likely be pressed to clarify how the privacy of LinkedIn user data will be preserved.
Microsoft going forward will likely be pressed to clarify how the privacy of LinkedIn user data will be preserved.

The data from Microsoft's purchase of LinkedIn for £18.6 bil ($26.2 billion) will indeed be used to enhance business for the Redmond tech giant, including dynamic CRM, but the company has not yet said how it plans to protect the privacy of personal data of LinkedIn members.

“The transaction is centred around data,” BigID CEO and Co-founder Dimitri Sirota told SCMagazine.com. While he says the value add to Microsoft is obvious, “I don't get how they'll preserve privacy and enforce it.”

He explained that “a whole lot questions come up when you're building a business case around data.” 

For instance, without the proper protections, it would be relatively easy to piece together a pretty complete picture of a LinkedIn member who was approaching recruiters, exposing the fact that the member was looking for another job or expressing dissatisfaction with a current work situation.

There is a certain synergy to the mammoth deal, which has Microsoft paying £139 ($196) per share for the professional services network that boasts more than 433 million users worldwide. “Together we can accelerate the growth of LinkedIn, as well as Microsoft Office 365 and Dynamics as we seek to empower every person and organisation on the planet,” Microsoft CEO Satya Nadella said in a release.

LinkedIn has seen its membership grow 19 percent year over year while unique visitors have increased nine percent to 105 million. Mobile usage has grown 49 percent and quarterly member page views have increased by 34 percent to 45 billion while active job listings have topped seven million, a 101 percent growth year over year. That's a lot of data to be had.

“But when personal information is involved, how do you preserve privacy rights?” said Sirota, who contends that the acquisition will likely “particularly resonate with Europe” where privacy regulation and data transfer strictures are hardening.

“It's very easy for data to be moved across borders and Privacy Shield is meant to form a legal framework” to protect information privacy, he said. “Now it has a situation where one company is essentially acquiring a database and the synergy is predicated on it being used for its business.”

Europe's lens will be focused on Microsoft and LinkedIn, he says, and the Redmond giant will have to clarify going forward how data will be protected, particularly since, Sirota said, monitoring and management functions are relatively immature.

“We've hit an inflection point, we leave a digital footprint all over,” he said of the amount of information users generate. “We've lost sight of data and how it's used. This deal just puts it in focus.”

Under the terms of the acquisition, Jeff Weiner will remain LinkedIn's CEO and report directly to Nadella.