Breakingviews - Facebook squeezes in M&A play before game turns

Stickers bearing the Facebook logo are pictured at Facebook Inc's F8 developers conference in San Jose, California, U.S., April 30, 2019. REUTERS/Stephen Lam

SAN FRANCISCO (Reuters Breakingviews) - Facebook has managed to make another M&A move before the D.C. game worsens. The $791 billion social network bought customer-relations platform Kustomer on Monday, which could be worth more than $1 billion, according to the Wall Street Journal. Even with all the pushback, regulatory reviews under U.S. President Donald Trump will be easier than his successor Joe Biden. Facebook can scoot in its last deals under the wire.

Despite the Trump administration’s criticisms of the company run by Mark Zuckerberg, it hasn’t stood in the way of deals. After its splashy $19 billion acquisition of WhatsApp in 2014, it has focused on smaller startups. Since 2017, the company has made investments in or acquired nearly 30 firms, including GIF-search engine Giphy in May and neural-monitoring startup CTRL-Labs last year.

That will likely change under U.S. President-elect Biden. Democrats have made antitrust scrutiny of Big Tech a priority, including proposing a moratorium on deals, including for startups. While a real crackdown would require legislation, and congressional approval, the Federal Trade Commission and the Justice Department have a say in matters, too. Both agencies could make life difficult for Zuckerberg by declining to clear smaller deals.

And yet Biden doesn’t have his hooks in the Beltway just yet. The FTC’s mooted lawsuit against the company, which includes investigating whether it had a pattern of dealmaking to squash nascent rivals, has been delayed because of the presidential transition. Biden also needs to get his team in place. With hundreds of senior posts needing Senate confirmation, it could be months before the new president has his picks installed at regulatory agencies. That gives Facebook time to squeeze in the Kustomer deal and maybe even a couple of others.


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