EU probes Facebook’s Kustomer buyout over data concern


In a short statement on May 12, the EU said Facebook will now have to formally notify the Kustomer transaction to the EU and that the firm ‘cannot implement the transaction before notifying and obtaining clearance from the Commission’. — Reuters

BRUSSELS: The EU commission has launched an investigation into a buyout by Facebook of a US startup over concerns that the social media giant could misuse personal data.

Facebook last year announced its purchase of Kustomer, a five-year-old company that specialises in helping businesses interact with customers online.

The commission, the EU’s powerful antitrust authority, said its investigation came at the request of 10 national authorities, with Austria making the original demand.

The deal is below the EU’s usual financial threshold for merger investigations, but Europeans have become extra vigilant over Big Tech’s appetite for startups and how it could harm competition.

Google’s purchase of Fitbit, the fitness wearables company, faced similar scrutiny with the giant forced to make assurances on data use in order to win the greenlight from Brussels.

In a short statement on May 12, the EU said Facebook will now have to formally notify the transaction to the EU and that the firm “cannot implement the transaction before notifying and obtaining clearance from the Commission”.

Facebook on Tuesday said “we look forward to demonstrating to regulators that Facebook and Kustomer would offer more choices and better services through this pro-competitive deal”.

The acquisition of Kustomer has raised red flags as it comes as Facebook continues a major push into e-commerce for its offerings, particularly its WhatsApp and Messenger messaging services.

A German regulator last week slapped a three-month ban on Facebook collecting user data from WhatsApp accounts, which is part of the company’s effort into increasing its effectiveness for businesses.

According to Facebook, more than 175 million people contact businesses via WhatsApp daily, and the number is growing.

The Kustomer platform provides software tools to help businesses more effectively tend to customer queries or concerns. – AFP

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