• Email Us: [email protected]
  • Contact Us: +1 718 874 1545
  • Skip to main content
  • Skip to primary sidebar

Medical Market Report

  • Home
  • All Reports
  • About Us
  • Contact Us

UK clears Facebook’s purchase of CRM maker, Kustomer

September 27, 2021 by David Barret Leave a Comment

The UK’s competition watchdog has cleared Facebook’s acquisition of Kustomer, a maker of CRM tools.

The purchase was announced last November — with a price-tag we reported as $1BN — but is pending closing after facing regulatory scrutiny.

The UK’s Competition and Markets Authority (CMA) opened an inquiry on the proposed merger this summer, at the end of July. The European Commission has also been digging into the implications of the deal.

Facebook buys Kustomer for $1B to expand into customer service tools

In a summary of its decision to greenlight Facebook’s latest bit of b2b shopping, the CMA said it looked at whether letting Facebook go ahead and scoop up the customer service software maker would dent competition by raising barriers to entry in the online display advertising market; whether Facebook might harm the competitiveness of customer service tools maker by limiting or degrading their access to its messaging channels; whether the tech giant might harm the competitiveness of other b2c messaging services by preventing them from integrating with Kustomer’s services; and whether Facebook could rely on cross-subsidizing from its online ads business to undercut competitors by offering Kustomer for free or on a freemium basis, thereby undermining the ability of others to compete.

For each concern (or ‘theory of harm’), the CMA goes on to explain that it was satisfied the acquisition did not meet the required bar of a “substantial lessening” of competition.

The small size of Kustomer appears to have helped allay concerns that letting Facebook assimilate the CRM maker might damage the wider market for such business tools.

“The CMA considers that, even if some competitors would struggle to respond to Facebook offering Kustomer on a free or freemium basis, sufficient competitive constraints would remain,” the regulator writes in its conclusion on the last theory of harm, for example, adding that it “considers that the largest providers may be in a position to adopt a freemium model, or to develop a basic low-price CRM product targeted at small businesses, with the expectation that CRM revenues would increase as businesses’ needs grew”.

“Most importantly, it is not necessary for other CRM providers to replicate the Merged Entity’s strategy in order to remain competitive,” it also writes. “While price is certainly an important dimension of competition, there are several other dimensions along which CRM providers could compete against the Merged Entity.”

Commenting on the green light in a statement, a Facebook spokesperson sought to spin the clearance as a positive endorsement of the deal as a boon to competitors, writing: “We welcome the CMA’s decision, which shows that this deal is good for competition. The transaction will increase competition and bring more innovation to businesses and consumers in the dynamic and competitive CRM and business messaging spaces. More people will benefit from customer service that is faster, richer and available whenever and however they need it.”

While the CMA has decided there’s nothing to see here, the EU is still considering whether to clear Facebook-Kustomer. So the regulatory scrutiny continues.

Facebook’s Kustomer buy could face EU probe after merger referral

A Commission spokesperson had no comment on the CMA’s clearance — but confirmed its own “in-depth investigation” is ongoing, adding that there’s a provisional deadline of January 7, 2022, for EU regulators to take their own decision.

Despite the CMA’s relatively quick clearance of this particular Facebook purchase, the UK regulator does continue to dig into competition concerns attached to Facebook’s earlier acquisition of animated Gif platform, Giphy.

After a finding of provisional concerns on Facebook-Giphy earlier this summer, it proposed remedies that could include ordering Facebook to unwind the acquisition — leading the tech giant to respond with a stinging rebuttal of any harms, earlier this month, accusing the regulator of making “fundamental errors” in its assessment of the competitive implications of that deal.

Regulatory scrutiny of big tech’s acquisitions in the region tends to focus on a fairly narrow consideration of competitive harms — such as how the CMA has looked at the Kustomer buy through the lens of the overall competitiveness of the CRM market.

However, in the Kustomer case, concerns have also been raised about the privacy implications of letting adtech giant Facebook get its hands on the support service’s customer data given that the smaller company operates in sectors including the health sector where it is likely to be processing sensitive information on behalf of its customers.

Back in February, for instance, the Irish Council for Civil Liberties (ICCL) raised a series of privacy concerns in a letter to Facebook — which it also published online, querying what uses the tech giant would be making for customer data held by Kustomer and asking whether such data would be combined with any other data held by Facebook and Facebook-owned companies.

Months later tbe ICCL said it had not had any response from Facebook to the letter raising privacy concerns.

Despite Europe’s comprehensive data protection framework — which is supposed to help safeguard people’s digital information — competition watchdogs in the region rarely consider privacy implications as part of their assessments of digital markets.

And there have been calls for more joined up working between competition and privacy regulators in order to properly tackle the market effects and consumer harms that can flow from digital giants’ command of other people’s information.

One outlier on this front is German’s Federal Cartel Office which has been doing just that — in a pioneering case against Facebook’s superprofiling (which is ongoing).

Perspectives on tackling Big Tech’s market power

Source Link UK clears Facebook’s purchase of CRM maker, Kustomer

David Barret
David Barret

Related posts:

  1. U.S. House Democrats seek to end cap on state, local tax deduction
  2. Golf-Masters runner-up Zalatoris named PGA Tour rookie of the year
  3. UK firms need to take their post-Brexit trade opportunity -trade minister
  4. Chinese state media slam medical beauty ads, urge regulation

Filed Under: News

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

  • Check Out This “Truly Exceptional” Fossil Of A Two-Headed Reptile That Lived 125 Million Years Ago
  • Longest Woolly Rhino Horn Ever Recovered Just Popped Out Of The Siberian Permafrost
  • Deer Can Learn Commands Like “Come”, But The Most Restless Ones In Class Take Longer To Learn
  • Is This Evidence Of The “Oldest Human Habit”? A New Study Has Different Ideas
  • Winds On Mars Are Faster Than Thought, Analysis Of 1,039 Dust Devils Shows
  • 400,000-Year-Old Fossil Shows Butchering Elephants Helped Early Humans To Supersize Their Tools
  • Ignore The Nonsense: Here Are The Real Images Of Interstellar Object 3I/ATLAS
  • This Rare Spider Is Half-Female, Half-Male Split Down The Middle – Oh, And A New Species
  • Comet 3I/ATLAS Caught On Camera From Mars Orbit: “This Was A Challenge”
  • JWST Captures Best Image Yet Of A Supergiant Star Before It Went Supernova
  • Isaac Newton’s “Apocalypse Calculations” Predicted A World-Changing Event In 2060
  • 2024-25 Saw The Most US Kids Dying From Flu Since The Swine Flu Pandemic
  • Technology, Tactics, Or Just Toughing It Out: How Exactly Did Neanderthals Take Down Mammoths, Anyway?
  • Nobel Prize In Chemistry Awarded For New Material Breakthrough
  • Interstellar Object 3I/ATLAS May Be A 10-Billion-Year-Old Time Capsule From An Earlier Age Of The Universe
  • Restless Leg Syndrome Might Increase Someone’s Risk Of Parkinson’s Disease
  • Behold! The World’s First Butt-Drag Fossil, Committed By A Rock Hyrax 126,000 Years Ago
  • Norovirus Is Rife On US Cruise Ships – 2025 Hits 18-Year Outbreak High
  • New Species Of Tiny Glowing Lanternshark And Ghost-Like Crab Discovered In Deep Sea
  • Hairy Frog: The Wolverine Frog That Breaks Its Bones To Make Claws When Threatened
  • Business
  • Health
  • News
  • Science
  • Technology
  • +1 718 874 1545
  • +91 78878 22626
  • [email protected]
Office Address
Prudour Pvt. Ltd. 420 Lexington Avenue Suite 300 New York City, NY 10170.

Powered by Prudour Network

Copyrights © 2025 · Medical Market Report. All Rights Reserved.

Go to mobile version