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Facebook: Bundeskartellamt initiates proceedings due to takeover plans

2021-07-23T10:09:57.263Z

The Federal Cartel Office has initiated further proceedings against the Internet giant. The authority is examining whether the planned takeover of a start-up in the USA falls within its scope.



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Entrance of the Federal Cartel Office (archive picture)

Photo: Henning Kaiser / dpa

The Federal Cartel Office has initiated further proceedings against the US Internet company Facebook.

The authority is examining whether the planned takeover of the start-up Kustomer by the online network falls within the scope of German merger control.

The company, founded in 2015 and based in New York, provides platforms for customer service and so-called chatbots that are supposed to be able to answer customer inquiries automatically.

"If it turns out that the merger is subject to registration with us, we would ask Facebook to immediately submit appropriate documents for an examination," said the President of the Cartel Office, Andreas Mundt. Many markets are already highly concentrated, especially in the digital economy. "That is why strict control is indispensable."

A so-called transaction value threshold was introduced in German competition law in 2017.

It allows an examination of mergers in which companies or assets are acquired for a purchase price of more than 400 million euros, but which still generate little or no sales.

In such takeover cases, the high purchase price is often a sign of innovative business ideas with high competitive market potential, according to the Federal Cartel Office's announcement.

Facebook announced the purchase of Kustomer in November of last year without giving details about the price or other financial conditions.

According to information from the Wall Street Journal at the time, Kustomer was valued at just over a billion dollars in the deal.

The Bundeskartellamt had already initiated “determination proceedings” against Facebook, Google, Amazon and Apple earlier this year.

These separate proceedings are about the question of whether these companies are of "cross-market importance" for competition.

If this is the case, the office can then prohibit certain business practices in a next step.

mic / dpa

Source: spiegel

All business articles on 2021-07-23

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