European regulators have finally approved Facebook's $19 billion purchase of WhatsApp, reasoning that the social network's acquisition of the messaging app doesn't hurt competition in the EU.
The European Commission said its months-long investigation into the proprosed merger covered the deal's effect on consumer communications services, social networking services and online advertising services. European Commission Vice President Joaquín Almunia, who's charge of competition policy, said most people use more than one messaging app, which leaves room for rivals to continue to grow.
"Consumer communications apps keep European citizens connected and are becoming increasingly popular," said Almunia. "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."
Facebook's biggest acquisition so far, the social networking company's $19 billion bid for WhatsApp was expected to gain the favorable nods needed to operate in the 29 countries of the EU. There was doubt injected into the European Commission's investigation, suggesting that Facebook and WhatsApp competed closely with one another.
"As regards social networking services, the market investigation showed that their boundaries are continuously evolving," stated the European Commission in its decision. "Some third parties suggested that WhatsApp is already a social network which competes with Facebook. However, the Commission found that the parties are, if anything, distant competitors in this area, in particular given a substantially richer experience offered by Facebook."
Despite WhatsApp's inactivity in online advertising, the European Commission investigated how much Facebook stands to gain if the social networking company injected marketing into the messaging app. While the commission said privacy issues weren't a concern of the investigation, it determined there would still be a large number of alternative sources from which marketers could harvest user data.
"This is because after the merger, 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," stated the European Commission. "In the context of this investigation, the Commission analysed potential data concentration issues only to the extent that it could hamper competition in the online advertising market."
