EU Readies Probe Into Facebook Kustomer Purchase

The European Union is set to launch an antitrust investigation into Facebook’s acquisition of customer service startup Kustomer.

As Reuters reported Friday (July 23), citing unnamed sources, the European Commission will hold a preliminary review of the deal on Aug. 2 before launching a more in-depth, 90-day probe.

Facebook announced the deal in November in an effort to scale up the instant messaging service WhatsApp, which has ballooned in popularity during the COVID-19 pandemic.

According to Reuters, Facebook has until Monday to “offer concessions to stave off the investigation but is unlikely to do so because of the difficulty of finding the right remedies to address competition concerns, the people said on condition of anonymity.”

Reuters said the European Commission declined to comment, while Facebook referred to an earlier statement, which says the deal is pro-competition and will offer businesses and consumers more innovation.

As PYMNTS reported last month, EU antitrust regulators have said they want to put greater scrutiny on deals that involve tech, pharma and biotech. They’re looking for warning signs of “killer acquisitions” in which larger companies buy up rivals to squelch competitions, a practice Facebook has been accused of in the past.

Germany’s antitrust agency on Friday said it was looking to determine if Facebook should get its approval as well, what the impact of the deal would be in Germany and if Kustomer has a significant presence in the country.

This probe comes at a time when Facebook and other Big Tech firms are facing more antitrust scrutiny on both sides of the Atlantic.

In the U.S., in addition to antitrust cases brought by the Federal Trade Commission (FTC) and several different states, Facebook could also be targeted by a bill created by Sen. Chuck Grassley of Iowa and Sen. Amy Klobuchar of Minnesota that would prevent tech companies from discriminating against smaller competitors. Critics of the bill say these measures would “destroy” the products consumers enjoy.