Antitrust Ruling On Facebook’s Kustomer Buy Expected By August

Facebook‘s fate in terms of its acquisition of U.S. customer service startup Kustomer will be decided by antitrust officials soon, U.S. News reports.

The deal was intended to help scale up the social media company’s WhatsApp, which saw a new spate of usage in the pandemic. It was announced late in 2020.

But with antitrust concerns being paramount these days, EU antitrust regulators want to look more closely at deals with tech, pharma and biotech startups.

They’re looking out for warning signs of “killer acquisitions” in which big companies buy out rivals to squash competition — something Facebook has been accused of before. Austria had asked the EU to take over the review. Now, the Commission can either clear the deal or decide that a four-month investigation would be prudent.

Earlier this year, Facebook hit a market cap of $1 trillion, with that making it the fifth company — following Apple, Microsoft, Amazon and Google parent Alphabet — to gain the distinction.

The revenue for Facebook is almost entirely the result of personal ads that Facebook users see when scrolling the popular social media site, along with companies it owns like Instagram.

The company has some new ideas in the pipeline, including a video-calling device and new virtual reality headsets from Oculus, with smart glasses slated to be released later in 2021.

Facebook’s recent controversies have included data leaks and false news reports.

But its plans to buy Kustomer were first reported in late November last year. PYMNTS writes that the deal’s terms weren’t disclosed, but that it could value the New York-based Kustomer at over $1 billion, according to sources. That would be a boost over Kustomer’s previous valuation of $710 million.

Kustomer’s services are of the software-as-a-service variety, an omnichannel platform that Facebook bought in order to bolster its options.