14 DAY TRIAL // Facebook’s $19 billion (€15.06 billion) acquisition of WhatsApp got the green light from the European Union Merger Regulation, as expected.
“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 characterized by network effects, the investigation showed that the merged entity would continue to face sufficient competition after the merger,” the document reads.
Back in February, Facebook announced that it had acquired WhatsApp for $16 billion (€12.68 billion) in cash and Facebook shares, and an additional $3 billion (€2.37 billion) worth of restricted stock units for the WhatsApp founders and employees.
The $19 billion deal is a premiere for Facebook and many believe that the messaging app has been vastly overvalued, but Zuckerberg has confidence that not only will WhatsApp hit 1 billion users in no time, but that it has the potential to unite the entire world.
“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 the dynamic and growing market. Consumers will grow to have a wide choice of consumer communications apps,” said Joaquin Almunia, the commission vice president in charge of competition policy.
The commission assessed that while Facebook Messenger and WhatsApp are similar in purpose, the first is specific given the integration with the Facebook social network. As for WhatsApp, it doesn’t require such a connection, just a phone number.
Furthermore, the European group found that there is plenty of competition in the market, with numerous competing apps available, such as Line, Viber, WeChat and Google Hangouts, to name a few.
Facebook competed with other giants for WhatsApp
Following the approval of the deal from the American competition officials, Facebook made a formal request with the European counterparts to make sure that everything was ok.
The company asked antitrust regulators to look into the purchase, review the deal and offer a clear response. This will save Facebook a lot of trouble in the future, in case there are any parties looking to accuse the company of anti-competitive behavior.
Facebook beat several other companies to the case when it bought WhatsApp. Google and Microsoft had also shown an interest, and it was rumored that Google had even made a bid, which the company later denied.