Social media giant Facebook closes another acquisition as antitrust concerns grow
- Facebook agreed to acquire CRM company Kustomer.
- The latest acquisition will help Facebook's chat properties.
- The company could be on the receiving end of antitrust lawsuits in the coming days, according to media reports
Social media behemoth Facebook, Inc. (NASDAQ: FB) is adding yet another company to its business as it agreed to buy the startup Kustomer for a little more than $1 billion.
Who is Kustomer?
Kustomer is an omnichannel client relationship management (CRM) platform that helps businesses automate repetitive tasks, Facebook said in its press release. The company’s platform helps workers maximize their productivity as it affords them more time to work on less repetitive tasks.
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The rationale behind acquiring Kustomer fits in with Facebook’s focus more on messaging and less on its core social media platform. Specifically, Facebook continues to invest in helping businesses use WhatsApp and Messenger to communicate with customers.
Facebook said that more than 175 million people use its messaging platform to interact with a business through WhatsApp alone.
The social media giant has completed more than 100 acquisitions over its history, WSJ noted. The most notable deal in the company’s history was the approximate $1 billion deal to acquire rival social media platform Instagram in 2012.
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Coinciding with Facebook’s latest acquisition, federal and state antitrust authorities could file new lawsuits against the social media company, sources separately told WSJ. The authorities are particularly interested in probing if Facebook is abusing its power to dominate the social media landscape.
Google is also in the crosshairs of antitrust authorities. The Alphabet Inc (NASDAQ: GOOG) unit has already been slapped with an antitrust lawsuit last month and authorities could be preparing four more cases targeting either Google or Facebook, the sources also said.
Facebook appears to have limited friends in Washington. Democrats argue the social media company isn’t active enough in combating misleading speech on its platform. On the other side of the aisle, Republicans argue the platform targets and silences conservative voices.
Ex-Federal Trade Commission Chairman William Kovacic noted antitrust authorities are confident there is a path to proceed with the legal proceedings despite who controls the White House.
“The supportive chorus of elected officials is giving assurance to DOJ and the FTC that they have the political support they need to blunt [the companies’] efforts…to pressure the agencies to back off or water down their cases,” WSJ quoted him as saying.
WSJ’s sources are saying the FTC is days away from approving an antitrust suit against Facebook. The particular suit will explore if Facebook disrupted the competitive environment through acquiring Instagram and WhatsApp.
The FTC could file in a district court that would allow state attorney generals to join in a suit of their own.