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Asia Today ISSN 1861-4604 Wednesday, May 23, 2018

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Facebook received EC approval for takeover of WhatsApp

Apps allow consumers to communicate by sending text, photoand video messages

Share on Facebook October 4, 2014, Reporter : BigNewsNet, Reader : 603

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BRUSSELS - Clearing the last regulatory hurdle Facebook , a leading global social network, Friday received European Union's clearance for its proposed $19 billion takeover of mobile messaging startup WhatsApp in a deal setting it against the telecoms industry.

The EU anti-trust body has determined that the two are "not close competitors". Both Facebook (via Facebook Messenger) and WhatsApp offer applications for smartphones (so-called "apps") which allow consumers to communicate by sending text, photo, voice and video messages.

The Commission in a statement said that post the merger "consumers would continue to have a wide choice of alternative consumer communications apps Although consumer communications apps are characterised by network effects, the investigation showed that the merged entity would continue to face sufficient competition after the merger.

Commission Vice President in charge of competition policy, Joaquin Almunia, said: "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."

Granting its approval, the EC highlighted three key areas where it believes the two do not create an anticompetitive environment for other players in this space: consumer communications services; social networking services; and online advertising services.

The third of these advertising is perhaps the most surprising of all.

The EC backs away completely from privacy questions, and goes so far as to say that if WhatsApp did run Facebook advertising, it still would not violate competition since there are so many other companies out there mining your data that are outside of Facebook's domain:

"There will continue to be a sufficient number of alternative providers to Facebook for the supply of targeted advertising, and a large amount of internet user data that are valuable for advertising purposes are not within Facebook's exclusive control," the Commission stated.

This was the last big regulatory hurdle that Facebook needed to clear after having received the approval earlier this year from the US Federal Trade Commission.

The landmark deal, which sets it against the telecoms industry, is the largest in Facebook's 10-year history and will give it a strong foothold in the fast-growing mobile messaging market.

WhatsApp and its rivals such as KakaoTalk, China's WeChat and Viber have in recent years won over telecoms operators' customers with a free text messaging option, posing a serious threat to the sector's revenues from this business, which totaled about $120 billion last year, according to market researcher Ovum.

 

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