UK’s Competition and Markets Authority (CMA) cleared Facebook’s purchase of Kustomer Inc., pending since November 2020. The UK antitrust authority dismissed the concerns it raised in its inquiry earlier this year and deemed the deal unlikely to prejudice Facebook’s competition.
Facebook announced the $1 billion deal in November 2020. However, several regulatory organizations started investigations of the implications of the acquisition. This is part of recent attempts to tighten restrictions on anticompetitive big tech moves.
The CMA examined several issues in its inquiry. For example, it looked at whether the acquisition would increase Facebook’s data advantage in online display advertising. After a thorough investigation, the regulator gave the green light to close the deal.
Facebook was happy with CMA’s final decision. A spokesperson said the company will continue to cooperate with future regulatory reviews around the globe.
Kustomer is a customer service software company that works to increase clients’ communication with their customers and streamline processes. It’s a popular help desk software solution, and the acquisition has strategic implications.
Gathering Strength
Facebook’s purchase of Kustomer is part of a plan to diversify the utility of its messaging platforms WhatsApp and Instagram. The aim is to monetize them by offering tools that allow businesses to interact with people via chat apps.
Even though the CMA cleared the deal, Facebook isn’t out of the woods yet. European and US regulators are still probing the acquisition. Their concerns are that this course could block competing customer-service solutions from integrating with those messaging platforms.
Scrutiny of Facebook began after it first purchased Instagram in a similar deal.
That acquisition was quick and quiet and led to a major boost to Facebook’s arsenal. Instagram stats show it generated $13 billion from ads alone in 2020. Regulators watching out for monopolies want to be more careful going forward.
The CMA is also currently looking at another one of Facebook’s acquisitions. The company is in the process of buying Giphy, a service that provides gifs to third-party sites. The probe of this deal has a deadline of December 2021.
Garan is a writer interested in how tech reshapes the environment, and how the environment reshapes tech. You'll usually find him inoculating against future shock and arguing with bots.
