The European Union may investigate Facebook’s acquisition of $ 1 billion in customer service platform Kustomer after concerns were raised against Facebook under EU merger rules.
A Commission spokeswoman confirmed that she had received a request to refer the proposed acquisition from Austria under Article 22 of the EU Merger Regulation – a mechanism that enables member states to flag a proposed transaction that is not reportable under national notification thresholds (e.g. because one of the company’s sales is too low to be formally notified).
The commission spokeswoman said the case was reported in Austria on March 31.
“Upon receipt of an Article 22 transfer request, the Commission must immediately forward the transfer request to other Member States who have the right to join the original transfer request within 15 working days of notifying the Commission of the original request,” she said, adding: ” After the deadline for other Member States to join the transfer, the Commission has 10 working days to decide whether to accept or reject the transfer. “
We’ll know in a few weeks whether or not the European Commission will take a look at the acquisition – an option that could stall the deal for months and delay Facebook’s plans to integrate the customer platform into their empire.
Facebook and Kustomer were contacted to get a comment on the development.
The technology giant’s planned purchase of the customer relations management platform was announced last November and quickly raised concerns about what Facebook might do with the personal data held by Kustomer. These could contain sensitive information as the sectors served by the platform include healthcare, government, and financial services, among others.
The Irish Civil Liberties Council (ICCL) wrote to the Commission as well as national and EU data protection authorities in February to raise concerns about the proposed takeover. He called for a review of the “consequences of data processing” and highlighted how Kustomer’s terms allow it to process user data for very wide-ranging purposes.
“Facebook is acquiring this company. The scope of “improving our services” [in Kustomer’s terms] is already diversified, but will likely expand after the takeover of Kustomer, ”warned the ICCL. “Our services” can mean, for example, all Facebook services, systems or projects. “
“The case law of the European Court of Justice and the European Data Protection Authority that improving our services and similarly vague statements do not qualify as ‘processing purposes’,” she added.
The ICCL also announced that it had written to Facebook asking for confirmation of the post-acquisition processing purposes for which the individuals’ data will be used.
ICCL Senior Fellow Johnny Ryan confirmed to Biomedarticles that Facebook had not received an answer to these questions.
We have also asked Facebook to confirm how it will handle the personal information Kustomer stores about users once it owns the business. This report is updated with every answer.
In a separate (most recent) episode that Google was involved in, the EU’s acquisition of wearable maker Fitbit underwent months of competitive scrutiny and was only approved by regional regulators after the tech giant made a number of concessions, including a commitment to Not using Fitbit data for ads for ten years.
So far, Facebook’s acquisitions have generally flown under regulators’ radar, including about a decade ago when the social space was sewn up by the purchase of rivals Instagram and WhatsApp.
A few years later, she was fined in the EU for a “misleading” filing – after combining WhatsApp and Facebook data, despite telling regulators that it was not possible.
With so many data scandals that are now inextricably linked to Facebook, the technology giant is confronted with distrust of customers by default and is faced with a much closer examination of its functionality – which is now causing friction in its plans, its B2B offering by purchasing one CRM to expand players. After Facebook moves fast and breaks things, it has to move slower because it has a reputation for breaking things.