Dec 1, 2020 - Technology

Facebook, Google push deals despite antitrust scrutiny

Illustration of group of people pulling down a large cursor
Illustration: Eniola Odetunde/Axios

Facebook announced Monday that it has purchased a customer service chatbot startup called Kustomer. The app reportedly cost Facebook $1 billion, the same amount it paid for Instagram in 2012.

Why it matters: The deal is the latest sign that the world's biggest tech companies, despite facing enormous antitrust scrutiny globally, will not stop buying up other companies.
.

The antitrust pressure is increasing as both companies continue to grow during the pandemic.

Be smart: For both Google and Facebook, recent acquisitions aim to bolster new businesses, like e-commerce, connected fitness and gaming.

  • Facebook earlier this year launched Facebook Shops, its most aggressive push yet into e-commerce. It also added a dedicating shopping tab to its main app in August, and more recently added a shopping tab to Instagram as well.
  • Google's expansion beyond search includes new bets on areas like hardware and wearable technology.

The bottom line: It's harder for regulators to prove that companies like Facebook and Google hold monopolies when they are new entrants in a market, so the companies' acquisitions in newer lines of business may not set off alarms.

Yes, but: Companies this size gain market power quickly.

  • Facebook says that, already, 200 million businesses worldwide use its free tools.
  • In its announcement today, it said that more than 175 million people contact businesses via WhatsApp, the global messaging service it acquired in 2014.

Go deeper: Members of Congress finding agreement on a tech antitrust agenda

Go deeper