updated 12:28 pm EDT, Thu July 10, 2014
Questionnaires sent by European Commission ahead of formal Facebook purchase review
Officials in the European Union are allegedly questioning competitors of WhatsApp over the proposed acquisition by Facebook. The European Commission, the competition authority, is said to have sent detailed questionnaires to a number of "major technology and online-messaging firms" about how much of an the impact the $19 billion merger will have on the messaging and social network marketplaces.
Though the exact content of the questionnaires is unknown, nor the recipients, the request by European Commission antitrust officials will apparently be important for all involved, as it will test how EU competition law affects the business of social media. "This is a bit of a toe in the water for the commission," an antitrust lawyer from Brussels advised to the Wall Street Journal. "It's the first time they'll look at social media seriously in terms of market power issues."
The questionnaire comes before an expected formal review by EU regulators requested by Facebook itself. Facebook asked regulators to examine the acquisition in May, as it is easier to hold one hearing covering the entire continent rather than one for each individual country. At the time, experts suggested Facebook would receive a "more neutral approach than national authorities," allowing Facebook to avoid any influence from worried carriers and other interest groups lobbying for the acquisition to not proceed.
Carriers are already suggesting there are antitrust issues in the acquisition, with Whatsapp and other services cutting into their SMS revenues. WhatsApp already has over 500 million active users per month, which when combined with Facebook's own messaging system, will grant Facebook a vast chunk of the overall messaging market. Privacy concerns could also arise, with the various surveillance revelations potentially influencing the EC's decision.
While Europe is taking a more cautious approach over the Whatsapp acquisition, the same cannot be said for elsewhere. In the United States, the Federal Trade Commission has already approved the deal, provided both companies adhere to existing user privacy arrangements.