EU Regulators Bless Facebook’s $19 Billion WhatsApp Acquisition
Telecom companies opposed to Facebook's proposed $19 billion acquisition of WhatsApp, a highly popular mobile messenger service, can go pound sand. That's basically what the European Commission said by approving the deal despite the outcry from telecoms that will have to find a way to compete with free voice-call services.
"Consumer communications apps keep European citizens connected and are becoming increasingly popular. While Facebook Messenger and WhatsApp are two of the most popular apps, most people use more than one communications app. We have carefully reviewed this proposed acquisition and come to the conclusion that it would not hamper competition in this dynamic and growing market. Consumers will continue to have a wide choice of consumer communications apps," said Joaquín Almunia, Commission Vice President in charge of competition policy.
The decision comes six weeks after Facebook won approval from the U.S. Federal Trade Commission (FTC). Part of the reason the European Commission also green-lit the deal is because it determined that Facebook Messenger and WhatsApp are not close competitors, primarily because Facebook Messenger offers a specific experience by being integrated with Facebook's social network.
"Users seem to use the two apps in different ways and many of them use the two apps simultaneously on the same mobile handset. Furthermore, this is a very dynamic market with several competing apps available on the market, such as Line, Viber, iMessage, Telegram, WeChat and Google Hangouts," the Commission noted.
The Commission also found that WhatsApp is not active in online advertising, therefore it wouldn't strengthen Facebook's position in that market and hamper competition. While it was conceded that Facebook could introduce advertising on WhatsApp, the Commission concluded that there would still be a "sufficient number of alternative providers" to supply targeted advertising.
In any event, this was the last potential roadblock for the deal to go through.
"Consumer communications apps keep European citizens connected and are becoming increasingly popular. While Facebook Messenger and WhatsApp are two of the most popular apps, most people use more than one communications app. We have carefully reviewed this proposed acquisition and come to the conclusion that it would not hamper competition in this dynamic and growing market. Consumers will continue to have a wide choice of consumer communications apps," said Joaquín Almunia, Commission Vice President in charge of competition policy.
The decision comes six weeks after Facebook won approval from the U.S. Federal Trade Commission (FTC). Part of the reason the European Commission also green-lit the deal is because it determined that Facebook Messenger and WhatsApp are not close competitors, primarily because Facebook Messenger offers a specific experience by being integrated with Facebook's social network.
"Users seem to use the two apps in different ways and many of them use the two apps simultaneously on the same mobile handset. Furthermore, this is a very dynamic market with several competing apps available on the market, such as Line, Viber, iMessage, Telegram, WeChat and Google Hangouts," the Commission noted.
The Commission also found that WhatsApp is not active in online advertising, therefore it wouldn't strengthen Facebook's position in that market and hamper competition. While it was conceded that Facebook could introduce advertising on WhatsApp, the Commission concluded that there would still be a "sufficient number of alternative providers" to supply targeted advertising.
In any event, this was the last potential roadblock for the deal to go through.
