ACCC approves Meta's proposed acquisition of Kustomer

Wednesday, 24 November, 2021

ACCC approves Meta's proposed acquisition of Kustomer

The ACCC has announced that it will not oppose the proposed acquisition of Kustomer by Meta, formerly known as Facebook Inc. Kustomer is a small customer relationship management (CRM) software-as-a-service provider based in the USA that focuses on business interactions with customers. Its services include collating customer interactions that occur through channels used by a business, such as Facebook Messenger, WhatsApp, Twitter, email, SMS and/or webchat.

Meta is a technology company that generates most of its revenue from advertising and related services on its digital platforms, Facebook and Instagram. Meta also offers three messaging services — Facebook Messenger, WhatsApp and Instagram — which businesses can use to communicate with customers. Meta also sells ads that direct customers to these services (such as click-to-message ads).

During its investigation into the proposed transaction, the ACCC heard from some market participants that access to Meta’s messaging services is an important input for some CRM providers, particularly those that service medium-sized businesses. ACCC Chair Rod Sims said the competition watchdog was initially concerned about the prospect of Meta restricting access to its messaging services for competing CRM providers; however, the ACCC concluded that Meta is unlikely to have an incentive to do this.

“We consider that Meta’s interest is in promoting use of its messaging services so that it can grow its advertising business. Restricting access for competing CRM providers is inconsistent with that. We found that Meta is likely to continue to promote its services through other CRM providers as well as Kustomer,” said Sims.

The ACCC also noted that Kustomer has a minimal presence in Australia, with minimal overlap between Meta and Kustomer’s services. The proposed acquisition is also subject to reviews by regulators in other jurisdictions, including the USA, the EU and the UK.

“Based on the information gathered during our investigation, we consider this proposed acquisition is unlikely to have a significant impact in Australia, and is not likely to result in a substantially lessening of competition in any market in Australia,” said Sims.

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