EU says yes to Facebook’s Whatsapp acquisition

Facebook is one step closer to officially owning WhatsApp after EU regulators approved the US$19-billion purchase. The regulators decided that the two were not “close competitors”, clearing the way for Facebook to lay claim to WhatsApp’s 600-million users, a valuable addition to its own 1.3-billion users.

In its remarks on the deal, the commission says:

“The European Commission has authorised, under the EU Merger Regulation, the proposed acquisition of WhatsApp Inc. by Facebook, Inc., both of the United States. Facebook (via Facebook Messenger) and WhatsApp both offer applications for smartphones (so-called “apps”) which allow consumers to communicate by sending text, photo, voice and video messages,” the EC said in a statement. “The Commission found that Facebook Messenger and WhatsApp are not close competitors and that consumers would continue to have a wide choice of alternative consumer communications apps after the transaction. 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, Joaquín Almunia, said in the statement:

“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.”

The deal, which was first struck back in February, has already been approved by the US’ Federal Trade Commission (FTC).

Facebook sent its request to the European Commission in May after it had already received the go-ahead from the FTC. As TechCrunch reports, once Facebook’s formal application had been received the commission sent out a 60-page questionnaire to a number of parties, including carriers, other messaging app makers and even potential customers.

“Your company is receiving this questionnaire because it has been identified by the Parties as a competing provider or as a customer in at least one of the above mentioned markets,” the introduction to the questionnaire reads.

While some may have thought that the existence of Facebook Messenger, along with its unbundling from the main Facebook product, might have swayed the commission away from approving the deal, it seems that it determined that the deal would not infringe on three key areas, namely: consumer communications services; social networking services; and online advertising services.