BRUSSELS, Belgium — The
EU on Monday deepened its
probe into Facebook's acquisition of Kustomer over concerns the social network
giant could restrict the US start-ups' rivals' use of its WhatsApp and
Instagram platforms.
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A preliminary investigation launched in May initially
focused on whether Facebook could misuse consumer data from Kustomer to give it
an unfair advantage in personalized advertising.
But the European Commission said in a statement that probe
has found another area of concern: "That Facebook may have the ability, as
well as a potential economic incentive, to engage in foreclosure strategies
vis-a-vis Kustomer's rivals, such as preventing these companies from using
Facebook's messaging channels or degrading access to these channels."
Those risks triggered the new "in-depth
investigation" weighing whether the planned buyout "would reduce
competition in the market for the supply of
Customer Relationship Management (CRM) software".
The commission's vice president in charge of competition
issues, Margrethe Vestager, said the EU executive had a duty to review
"potentially problematic acquisitions by companies that are already
dominant in certain markets".
She said: "This applies in particular to the digital
sector, where Facebook enjoys a leading position in both online display
advertising and in over-the-top messaging channels, such as WhatsApp, Messenger
or Instagram.
"Our investigation aims to ensure that the transaction
will not harm businesses or consumers, and that any data that Facebook gets
access to does not distort competition."
Facebook last week reported that its profit over the last
quarter doubled compared with the same period last year, to $10.4 billion (8.8
billion euros), as digital advertising surged.
The number of people using the social network monthly stood
at 2.9 billion and 3.5 billion people used at least one of the company's apps
including Instagram, WhatsApp and Messenger.
Last year, Facebook announced its purchase of Kustomer, a
six-year-old company that provides CRM software that allows businesses to
manage within one tool all customer interactions, by phone, email, text
messages, WhatsApp, Messenger and Instagram.
The commission statement said any Facebook strategy of
restricting Kustomer rivals' access to WhatsApp or Instagram "could reduce
competition in the market for the supply of CRM software and the market for the
supply of customer service and support CRM software".
That, it said, could lead to "higher prices, lower
quality and less innovation for business customers, which may in turn be passed
on to consumers".
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