Meta Platforms’ (FB) Facebook has secured conditional European Union antitrust approval to acquire customer service startup Kustomer. Reuters reports that the company secured the green light on agreeing to provide rivals free access to messaging channels over the next ten years.
Meta Platforms is a holding company and owner of the social networking app Facebook. It also owns other social networking apps, including Instagram, Messenger, and WhatsApp. The company has scheduled its upcoming earnings report for February 02.
Europe’s antitrust agency, the European Commission, says Facebook’s pledge addresses significant competition concerns. EU antitrust chief Margrethe Vestager maintains that Facebook acquiring Kustomer will not hinder competition, but will ensure new entrants and rivals compete effectively.
Kustomer will be a big addition as it manages CRM software that allows businesses to communicate with consumers via phone, email, text messages, WhatsApp, and Instagram. It is expected to help the social networking company scale its instant messaging apps, which have seen increased usage amid the pandemic.
While big tech companies have been on an acquisition spree as they look to strengthen their networks and competitive edge, the moves have triggered increased regulatory scrutiny. Regulators are worried that some companies are only pursuing deals to shut down potential rivals.
RBC Capital analyst Brad Erickson has reiterated a Buy rating on FB stock with a $400 price target, implying 35.76% upside potential to current levels.
Consensus among analysts is a Strong Buy based on 12 Buys and 1 Hold. The average Meta Platforms price target of $406.54 implies 37.98% upside potential to current levels.
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