Welcome to "#SocialStocks," The Fly's weekly recap of Wall Street's reactions to social media stock news.
ANTITRUST LATEST: The European Commission has opened an in-depth investigation to assess the proposed acquisition of Kustomer by Facebook (FB) under the EU Merger Regulation. The Commission is concerned that the proposed transaction would reduce competition in the market for the supply of Customer Relationship Management software. The Commission is also concerned that the proposed transaction would further strengthen Facebook's market position in the online display advertising market by increasing the already significant amount of data available to Facebook for personalization of the ads it displays. Executive Vice-President Margrethe Vestager, responsible for competition policy, said: "It is important to closely review potentially problematic acquisitions by companies that are already dominant in certain markets. This applies in particular to the digital sector, where Facebook enjoys a leading position in both online display advertising and in over-the-top messaging channels, such as WhatsApp, Messenger or Instagram. Our investigation aims to ensure that the transaction will not harm businesses or consumers, and that any data that Facebook gets access to does not distort competition." Following its preliminary investigation, the Commission has concerns about the impact of the transaction:
In particular, the Commission is concerned that, as a result of its combination with Kustomer, Facebook may foreclose access to its business-to-consumer (“B2C”) over-the-top (“OTT”) messaging channels, namely WhatsApp, Messenger or Instagram. These channels account for a large portion of the B2C OTT messaging market, which is an important input for the supply of CRM software services. The preliminary investigation suggests that Facebook may have the ability, as well as a potential economic incentive, to engage in foreclosure strategies vis-à-vis Kustomer's rivals, such as preventing these companies from using Facebook's messaging channels or degrading access to these channels. Such foreclosure strategies could reduce competition in the market for the supply of CRM software and the market for the supply of customer service and support CRM software, leading to higher prices, lower quality and less innovation for business customers, which may in turn be passed on to consumers.
2. On the markets for the supply of online display advertising services, or segments thereof, where the Commission, at this stage of the investigation, considers that Facebook may hold a dominant market position in several Member States.
By acquiring Kustomer, Facebook could more easily obtain data from businesses making use of Kustomer's CRM software, including (i) “customer transaction data” which includes customer data such as on gender, order and purchase history, and (ii) “other event data”, such as customer's website views, adds to wishlist and store visits. The data that businesses store in Kustomer's CRM software and which they may share with Facebook appears to provide an important advantage in the online display advertising market. By increasing the data advantage of Facebook in its ability to better personalise and target the ads it provides, it would be more difficult for rivals to match Facebook's online advertising services. Thus, the transaction would raise barriers to entry and expansion for Facebook's competitors for these services, to the ultimate detriment of advertisers and publishers that would face higher prices and have less choice. The Commission will now carry out an in-depth investigation into the effects of the transaction to determine whether its initial competition concerns are confirmed.
The proposed transaction was notified to the Commission on June 25. The Commission now has 90 working days, until December 22, to take a decision. The opening of an in-depth inquiry does not prejudge the final result of the investigation.
The proposed transaction did not meet the turnover thresholds of the EU Merger Regulation. However, the transaction was required to be notified to Austria for regulatory clearance. Following such notification, on 2 April 2021, Austria submitted a referral request to the Commission pursuant to Article 22(1) of the EU Merger Regulation. On 12 May 2021, the Commission accepted the request from Austria, which was joined by Belgium, Bulgaria, France, Iceland, Ireland, Italy, the Netherlands, Portugal and Romania. Following this acceptance, the referring Member States will not apply their own national legislation on competition to the transaction. The Commission will assess the impact of the acquisition of Kustomer by Facebook within the territory of these Member States under the EU Merger Regulation.
ZIP RECRUITER AND FACEBOOK TEAM UP: "Job seekers who receive credentials through Facebook Blueprint-Facebook's platform offering online learning courses, training programs, and certifications related to digital marketing-can take advantage of a new ZipRecruiter-powered website to find their next great opportunity," ZipRecruiter (ZIP) announced in a press release. "The job market has shifted tremendously over the past year. In the wake of the pandemic, Americans are turning from community colleges and universities towards more affordable online training programs, and employers are moving from degree-based hiring to a focus on skills and competencies. ZipRecruiter is excited to team up with Facebook to expand career opportunities for more Americans and create streamlined pathways into attractive new-collar jobs," says ZipRecruiter CEO and co-founder Ian Siegel.
FACEBOOK DABBLES IN MOVIES: For the first time, a film distributor will use Facebook to debut a movie exclusively on the platform via a ticketed live event, Sara Fischer of Axion reported, citing statements made to Axion by Facebook executives. This can lower the barrier for smaller filmmakers and studios to distribute content that would otherwise need an international distributor. The film, called "The Outsider," will be available via Facebook Live to Facebook users worldwide on August 19. Any Facebook users in the over 100 countries where Paid Online Events are available have access to the movie. Reportedly, Facebook will be providing paid promotion to help market the event. Facebook is still not taking a piece of ticketed events or revenue from independent creators until 2023. The film documents the construction of the National 9/11 Memorial and Museum.
ZOOM SETTLES PRIVACY RIGHTS LAWSUIT: Zoom Video (ZM) agreed to pay $85M and bolster its security practices to settle a lawsuit claiming it violated users' privacy rights by sharing personal data with Facebook, Google (GOOG, GOOGL) and LinkedIn (MSFT), and letting hackers disrupt Zoom meetings in a practice called Zoombombing, Reuters' Jonathan Stempel reported. A preliminary settlement filed on Saturday afternoon requires approval by U.S. District Judge Lucy Koh in San Jose, California, the report added. The San Jose-based company denied wrongdoing in the settlement agreement. In a statement on Sunday, Zoom said: "The privacy and security of our users are top priorities for Zoom, and we take seriously the trust our users place in us." Zoom has updated security measures including alerting users when meeting hosts or other participants use third-party apps in meetings, and to provide specialized training to employees on privacy and data handling. Zoombombing is where rogue users take control of Zoom meetings and display pornography, use racist language or post other disturbing content. Koh said Zoom was "mostly immune" for Zoombombing under Section 230 of the federal Communications Decency Act, which protects online platforms from liability over user content.
OCULUS RECALL: Facebook is recalling about 4M Oculus Quest 2 Virtual Reality Headsets removable foam facial interfaces, included with a purchase of Oculus Quest 2 Headsets, and sold separately as a "Quest 2 Standard Facial Interface" or in a "Quest 2 Fit Pack. Additionally, about 172,600 components in Canada are being recalled. The foam facial interfaces can cause facial skin irritation and reactions including rashes, swelling, burning, itching, hives, and bumps, according to a notice posted with the CPSC. The firm has received approximately 5,716 reports of incidents of skin irritation and approximately 45 reports of consumers that required medical attention. The foam interface is black in color and is attached to the Oculus Quest 2 headset, and is the interface between the headset and the user’s face.
STUDY SHOWS SOCIAL MEDIA COMPANIES DON'T ACT ON ANTI-SEMEITIC POSTS: Facebook, Twitter (TWTR), Instagram, YouTube, and TikTok failed to act on 84% of posts spreading anti-Semitism reported via their own complaint systems, The Guardian's Maya Wolfe-Robinson reported, citing a study from the Center for Countering Digital Hate, a non-profit organization. Researchers from the CCDH flagged hundreds of anti-Semitic posts over a six-week period earlier this year. The posts received up to 7.3M impressions. Facebook was the worst offender, acting on just 10.9% of posts, despite touting tougher guidelines on content last year, according to the study. Twitter also showed a low rate of enforcement, removing 11% of posts or accounts and not acting on hashtags such as #holohoax or #JewWorldOrder. YouTube acted on 21% of reported posts, while Instagram and TikTok came in around 18%.
Ticker changed to META
+7.76 (+2.21%)
Zoom Video
+25.96 (+6.93%)
-0.01 (-0.01%)
Alphabet
-2.46 (-0.09%)
Alphabet
-8.45 (-0.31%)
Microsoft
-0.24 (-0.08%)
ZipRecruiter
+0.46 (+1.69%)