EU OKs Facebook’s $19B WhatsApp Acquisition, Clearing The Last Antitrust Hurdle

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This just coming in: the EU has approved Facebook’s $19 billion acquisition of WhatsApp — deciding that the two are “not close competitors”. WhatsApp today has 600 million users, while Facebook has 1.3 billion, with 300 million using its Facebook Messenger product.

This marks closure for the last big regulatory hurdle that the social network needed to pass before closing the deal.

“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.”

While Almunia has had to concede a delay for his Google antitrust case, this gives him closure on the other big tech case that he has had on his plate.

Facebook’s $19 billion acquisition of messaging startup WhatsApp was cleared by the Federal Trade Commission in the U.S. earlier this year.

A decision from the European Commission had been due today — and sources at the Competition Commission had said the investigation was “following its course.”

There were had also been hearing reports that the decision would face a delay, so it will be worth watching whether opponents may try to lodge an appeal on this.

Facebook’s application to the European Commission for an antitrust review of the deal was first made public in May of this year — about six weeks after FTC approval. After the formal application was made at the end of August, the Competition Commission in September mailed out a 60-page questionnaire to a number of parties to ask further questions.

The questionnaire was sent far and wide to a range of parties like carriers and other messaging app makers but also 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.

In the event, the EC has written a lengthy reply that outlines its thinking in how the merger would not infringe on three key areas of competition in the digital sphere: consumer communications services; social networking services; and online advertising services. More on that response here.