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EU expands investigation of Facebook’s takeover of Kustomer

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 The European Union (EU) has expanded its investigation into Facebook’s acquisition of Kustomer, a startup specializing in Customer Management Systems (CRM).

The European Union (EU) has expanded its investigation into the deal Facebook acquired Kustomer, a startup specializing in Customer Management Systems (CRM) due to concerns the social networking giant could restrict US startups from using WhatsApp and Their Instagram.

Previously, the preliminary investigation launched in May focused only on whether Facebook may have abused Kustomer’s consumer data to gain an advantage over competitors in advertising campaigns. myself.

In a statement, the European Commission (EC) said that in the course of work, EU investigators discovered another questionable matter, that is Facebook may have the ability, as well as the motive to profiteering to engage in strategies such as “foreclosure” on Kustomer’s competitors, such as preventing these companies from using Facebook on messaging channels or reducing access to these channels.

This is why the EU’s law enforcement agencies are conducting a “new, more in-depth investigation” to see if the Facebook acquisition has harmed competition in the market. provide CRM software or not.

The EU’s executive vice-president for competition affairs, Margrethe Vestager, said the EU’s executive body was tasked with looking at “unclear purchases between companies, which are common in a single country number of markets today”. 

This is especially important for digital, Vestager said, where Facebook dominates both online display advertising and top messaging channels like WhatsApp, Messenger, or Instagram.

“Our investigation is aimed at ensuring that the Facebook purchase will not cause harm to businesses or consumers and that any data that Facebook has access to is not harmed,” the European official said. does not affect the competitiveness of the market.”

The EC statement asserted that any strategy by Facebook to restrict Kustomer competitors’ access to WhatsApp or Instagram “could reduce competition in the market for providing CRM software as well as the market for providing services and CRM software to support customers”.

This may result in corporate customers having to pay higher prices but lower quality” for this product.

Last week, Facebook reported profits for the second quarter of 2021 that doubled from the same period last year to $10.4 billion (€8.8 billion), as digital advertising surged.

The number of monthly users of this social network reaches 2.9 billion and 3.5 billion people have used at least one of Facebook’s applications, including Instagram, WhatsApp, and Messenger.

Last year, Facebook announced it was buying Kustomer, for $1 billion. Acquiring a software company like Kustomer is unusual for Facebook.

In the past, Facebook has mainly acquired companies that provide services to consumers, such as Giphy and Spanish cloud video game company PlayGiga.

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