European Union: EC opens investigation into Facebook's proposed acquisition of Kustomer after referral requests by EU member countries

On 12 May 2021, the European Commission (EC) opened an investigation into Facebook's planned acquisition of Kustomer, a U.S. customer relationship management provider. The investigation was initiated after Austria filed a referral request under Art. 22(1) EU Merger Regulation (EUMR) with the EC. Such a referral request was only made possible through the new EC guidance regarding Art. 22 EUMR published on 26 March 2021, which supports EU-based national competition authorities to refer deals to the EC even though they don't meet national merger control thresholds, to achieve seamless enforcement. As a consequence, any merger with possible detrimental effects for competition in EU member states may be subject to an EC investigation. The referral request for an investigation was supported by more than 10 EU member states including France, Italy and the Netherlands. Facebook now needs to notify the EC about the planned acquisition of Kustomer and cannot finalize the merger until the EC approves of the transaction.