The European Union may investigate Facebook’s $ 1 billion acquisition of the Kustomer customer service platform after concerns were brought to its attention under EU merger rules.
A Commission spokesperson confirmed receiving a referral request for Austria’s proposed acquisition under Article 22 of the EU Merger Regulation – a mechanism that allows Member States to report a proposed transaction that cannot be notified below the national filing thresholds (for example, because the turnover of one of the companies is too low for formal notification).
The Commission spokesperson said the case was notified in Austria on March 31.
‘Following receipt of a referral request under Article 22, the Commission shall promptly forward the referral request to the other Member States, which will have the right to join the initial referral request within 15 working days after being informed by the Commission of the initial request ”, she told us, adding:“ After the expiry of the deadline for the other Member States to join the referral, the Commission will have 10 working days to decide whether to accept or reject the referral. “
We’ll know in a few weeks whether or not the European Commission will look into the acquisition – an option that could block the deal for months, delaying Facebook’s plans to integrate the Kustomer platform into its empire.
Facebook and Kustomer have been contacted for comment on the development.
The tech giant’s planned purchase of the customer relationship management platform was announced last November and quickly raised concerns about what Facebook could do with the personal data held by Kustomer – which could include sensitive information, as the sectors served by the platform include healthcare, government and finance. services, among others.
Last February, the Irish Civil Liberties Council (ICCL) wrote to the Commission and national and European data protection agencies expressing concerns about the proposed acquisition – calling for careful consideration of ” consequences of data processing ”and highlighting how Kustomer’s conditions allow it to process user data for a wide variety of purposes.
“Facebook is buying this company. The scope of “ improving our services ” [in Kustomer’s terms] is already large, but it is likely to expand after the acquisition of Kustomer, ”warned the ICCL. “Our services” can, for example, be interpreted to mean any Facebook service, system or project. “
“The constant case law of the European Court of Justice and the European Data Protection Board, according to which” the improvement of our services “and equally vague declarations are not qualified as” purpose of the processing “”, a- he added.
The ICCL also stated that it has written to Facebook to request confirmation of the purposes of post-acquisition processing for which personal data will be used.
Johnny Ryan, a senior fellow at ICCL, confirmed to TechCrunch that he had not received any response from Facebook to these questions.
We have also asked Facebook to confirm what it will do with the personal data held about users by Kustomer once it owns the business – and will update this report with any response.
In a separate (recent) episode – involving Google – its acquisition of clothing maker Fitbit underwent months of competitive scrutiny in the EU and was only cleared by regional regulators after the tech giant made a number of concessions, including committing not to use Fitbit data. for advertisements for ten years.
Until now, Facebook’s acquisitions have generally gone under the radar of regulators, including, a decade ago, when it sewed up the social space by buying rivals Instagram and WhatsApp.
Several years later, he was forced to pay a fine in the EU for a ‘misleading’ filing – after combining WhatsApp and Facebook data, when he told regulators he couldn’t to do.
With so many data scandals now inextricably linked to Facebook, the tech giant is grappling with customer distrust by default and facing a much closer scrutiny of how it operates – which now threatens to inject friction into its businesses. plans to expand its b2b offer by acquiring a CRM. player. So after “ moving fast and breaking things, ” Facebook has to move slower due to its reputation for breaking things.