The European Commission will investigate the acquisition of customer-service software maker Kustomer by Facebook. Various national competition authorities, including the ACM, support Austria’s request to the European Commission to assess this acquisition. Kustomer displays all interactions that a consumer has had with the business in a single timeline view, including the consumer’s purchase history, refunds, complaints and all other communications. In these systems, various communication platforms, for example Facebook, Instagram, or Whatsapp, are integrated in the customer care.
The Netherlands Authority for Consumers and Markets (ACM) has concerns that this acquisition may be harmful to competition, and may lead to higher prices, reduced quality, or less innovation in the Netherlands and the European Union. In particular, the ACM considers that the transaction might affect competition in the markets for CRM software and online display advertising services.
Why is this case so important?
In both the pharmaceutical industry and in sectors related to the digital economy, ACM sees a trend of larger companies buying up smaller, often innovative companies. In that way, larger companies are able to manufacture and bring to market innovative products faster. However, there are also risks associated with such practices, as they can also hinder, or eliminate future competition. Subsequently, it may be easier for large companies to drive up prices or reduce quality. It can also be harmful to innovation. As a result of such acquisitions, new developments that are spearheaded by these smaller companies will take place either later or not even at all. ACM finds it important that, with regard to the acquisition at hand, attention is paid to ensuring a well-functioning market for people and businesses, now and in the future.
Why will the European Commission launch this investigation?
If a Member State has serious concerns, and there is no European notification obligation, European countries will then have the opportunity to request the European Commission to launch an investigation anyway. This case, which was notified in Austria, represents the second time this year that a Member State, supported by other Member States, has requested the European Commission to assess the acquisition. A few weeks ago, a request was filed for the acquisition of pharmaceutical firm GRAIL by biotech firm Illumina.