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Competition Watchdog: Concerns over Facebook takeover plans
Facebook’s takeover plans raise concerns among competition watchdogs. Photo: Fabian Sommer / dpa
Facebook announced in November that it would buy the start-up Kustomer. The EU’s competition authorities are critical of the project – they fear several risks.
The EU’s competition authorities have raised concerns about Facebook’s planned purchase of the start-up Kustomer.
Specifically, according to the EU Commission, it is feared that the acquisition could limit competition in the market for customer relationship management (CRM) software. In addition, the auditors see the risk that Facebook’s position in the online advertising market could be further strengthened because the company would have even more data available to personalize its ads.
According to the information provided, the proposed transaction will now be subject to an in-depth investigation under the EU Merger Regulation. If they conclude that the merger would significantly impede competition, they could prohibit it. A decision is due by 22 December.
“Our aim is to ensure that the transaction does not lead to disadvantages for businesses and consumers and that the data to which Facebook has access does not distort competition,” commented Commission Vice-President Margrethe Vestager. Especially in the digital sector, it is important to take a close look at potentially problematic takeovers by companies with a dominant market position.
The online network Facebook announced last November that it would strengthen its customer service offerings with the purchase of Kustomer. Details of the price or other financial conditions were not given at the time. According to earlier information from the “Wall Street Journal”, Kustomer is valued at just over one billion dollars (842 million euros) in the deal. Founded in 2015, the company provides platforms for customer service and so-called chatbots, which are intended to answer customer inquiries automatically.
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