Europe Approves Facebook’s $19 Billion Deal for WhatsApp

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SHAFAQNA – Facebook is nearing the finish line of its $19 billion acquisition of the Internet messaging service WhatsApp. On Friday, Europe’s competition authorities approved the deal despite vocal opposition from telecom companies, which voiced concerns that the deal would harm their messaging and voice businesses.

The unanimous approval, which follows a similar green light from the American authorities in April, is the final step before the acquisition can be completed.

The deal is now expected to close within the next couple of months, if not earlier.

Facebook’s purchase of WhatsApp had been viewed by industry watchers as a test of how Europe’s antitrust watchdog would view acquisitions in the fast-paced world of Internet companies like Facebook and Twitter.

“We have come to the conclusion that it would not hamper competition in this dynamic and growing market,” Joaquín Almunia, the European antitrust chief, said in a statement on Friday. “Consumers will continue to have a wide choice of consumer communications apps.”

Europe’s monthslong review had focused on whether the $19 billion deal would limit local users’ access to so-called Internet messaging services, which allow individuals to send messages through their smartphones.

WhatsApp, which is based in California, charges users a yearly fee of just 99 cents for the messaging product.

While almost one billion people, most of them outside the United States, now use WhatsApp and Facebook Messenger, the social network’s separate messaging service, European antitrust authorities said there was still enough competition in the market to give consumers sufficient choice.

“Facebook Messenger and WhatsApp are not close competitors,” the European Commission, the executive arm of the European Union, said. “There is a large number of alternative service providers, including other consumer communications apps, such as Line and WeChat.”

Europe’s telecom operators also had expressed concern about the deal, as Facebook and WhatsApp’s messaging services compete directly with their existing text message businesses, which still generate sizable revenues for the likes of Telefónica of Spain and Deutsche Telekom of Germany.

And this year, Jan Koum, WhatsApp’s chief executive, announced that the company would start offering Internet calls through smartphones in a sign that the start-up is increasingly moving into the telecom operators’ territory.

Privacy groups also have criticized Facebook’s purchase of WhatsApp, as they fear the social network may combine the data from the start-up’s users with the online profiles of Facebook’s more than 1.2 billion users. Both companies have said that they would not share information between the services.

Despite Europe’s hard line on how companies use individuals’ online data, the Continent’s antitrust authorities said Friday that those concerns had not been included in their review of the multibillion-dollar deal.

“Any privacy-related concerns flowing from the increased concentration of data within the control of Facebook as a result of the transaction do not fall within the scope of E.U. competition law,” the European Commission said in its statement.

Source : http://bits.blogs.nytimes.com/2014/10/03/europe-approves-facebooks-19-billion-purchase-of-whatsapp/

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