EU approves Facebook-WhatsApp acquisition
With FTC approval out of the way, deal should tie up soon
EU regulators have green-lighted Facebook's acquisition of mobile messenger service WhatsApp, despite the deal being disputed by telecoms companies.
The European Commission said in a statement the two firms were "not close competitors" and that consumers would continue to have a wide choice of alternative consumer communications apps after the transaction.
The $19bn (11.9bn) deal is the largest in the social networking firm's ten-year history and gives Facebook a significant presences in mobile messaging.
Commission Vice President in charge of competition policy, Joaqun Almunia, said, while Facebook Messenger and WhatsApp are two of the most popular messaging apps available, 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," he said.
Commissioners said the two apps were used by customers in different ways and many used both "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."
In the ruling, the EC said the consumer communications apps market is characterised by network effects with apps becoming more useful to customers as the number of users increases. While this has helped both Facebook Messenger and WhatsApp, the EC said there were a number of factors that mitigated these network effects for the apps.
The Commission said the consumer communications apps market is fast growing and characterised by short innovation cycles in which market positions are often reshuffled.
"Moreover, launching a new app is fairly easy and does not require significant time and investment. Finally, customers can and do use multiple apps at the same time and can easily switch from one to another," it said.
The Commission added that concerns over privacy stemming from the increased amount of data collected on users by the two apps for Facebook "do not fall within the scope of EU competition law."
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