Mergers: Commission to assess proposed acquisition of Kustomer by Facebook

(Source: EU Commission)

Mergers: Commission to assess proposed acquisition of Kustomer by Facebook

The European Commission has accepted requests submitted by Austria, Belgium, Bulgaria, France, Iceland, Italy, Ireland, the Netherlands, Portugal and Romania to assess the proposed acquisition of Kustomer by Facebook under the EU Merger Regulation. Facebook, based in the U.S., is a provider of websites and applications for mobile devices offering social networking, consumer communications and photo and video-sharing functionalities, including the messaging channels Messenger, WhatsApp and Instagram Messaging. Kustomer, based in the U.S., offers a customer relationship management (‘CRM’) software as a service (‘SaaS’) specialising in assisting business’ customer service agents to manage communications with consumers. The proposed acquisition does not meet the turnover thresholds set by the EU Merger Regulation and therefore it was not notified to the European Commission. The transaction was notified instead by Facebook for regulatory clearance in Austria, where the transaction meets the national merger notification threshold. Austria submitted a referral request to the Commission pursuant to Article 22(1) of the EU Merger Regulation. This provision allows Member States to request that the Commission examine a merger that does not have an EU dimension but affects trade within the single market and threatens to significantly affect competition within the territory of the Member States making the request. Other countries of the European Economic Area had the opportunity to join the original referral request. Subsequently Belgium, Bulgaria, France, Iceland, Italy, Ireland, the Netherlands, Portugal and Romania joined Austria’s referral request. On the basis of the information submitted by Austria and the countries joining the referral request, and without prejudice to the outcome of its full investigation, the Commission considers that the transaction meets the criteria for referral under Article 22. In particular, the Commission considers that the transaction might affect competition in the markets for CRM software and online display advertising services. The Commission also concluded that it is best placed to examine the potential cross-border effects of the transaction. The Commission will now ask Facebook to notify the transaction. Facebook cannot implement the transaction before notifying and obtaining clearance from the Commission. 

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