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As per the official reports, verifying last week’s forecasts, the EC (European Commission), which is the major antitrust power of the EU (European Union), agreed on the Facebook’s 19bn acquisition of WhatsApp (cross-platform messaging application), which was initially publicized way back in Feb.
The European Union has announced its decision in a press release that they don’t think so that WhatsApp and the Facebook messenger are close rivals to suffocate other contestants within the messaging zone, and moreover, the grouping of the Facebook and WhatsApp will not decrease customer preference.
Certainly, the contract was approved in the month of April by U.S. Federal Trade Commission along with the condition that WhatsApp has to preserve its pre Facebook privacy practices.
Way back in May, WhatsApp requested the European Union to review the proposed merger instead of subjecting the deal to analysis in various countries in the European Union region.
Moreover, it has been reported that the European Commission sent several questionnaires to the competitor online messaging companies in the month July and afterwards, Facebook stated in its 10-Q form casing with the SEC (Securities and Exchange Commission) about the extension of the deadline to close the acquisition by one year, to Aug. 19th, 2015.
European Commission also sent more questionnaires to several businesses including telecommunication operators, other social-networking sites and Internet-service providers.
The European Union says in one of its press release that:
The European Commission is authorized, under the EU Merger instruction, and planned the acquisition of WhatsApp by Facebook, both of the U.S. Facebook and WhatsApp both offer apps for smartphones which will permit customers to communicate by sending text, photo, voice and video messages.
It was founded by commission that Facebook Messenger and WhatsApp are not seems to be a close rivals and customers would have a wide choice of other interactions apps after the transaction. However these apps are distinguished by network effects, the inquiry revealed that the merged unit will continue to face enough amount of competition even after the merger.
WhatsApp is not considered to be more active in online advertising, from this the commission has analyzed, whether the transaction could reinforce Facebook’s position in the market and hamper competition or not.
Commission also analyzed the prospect that Facebook could introduce advertising on WhatsApp and WhatsApp as a latent source of user data for improving the objective of Facebook’s advertisements.
From this, the commission has concluded that, whether Facebook would initiate advertising on WhatsApp or start gathering WhatsApp user data, from this competition concerns are not raised.
Because of this even after the merger, there will be an enough number of substitute providers to Facebook for the supply of targeted advertising, and a large amount of Internet user data that are precious for advertising purposes are not within Facebook’s restricted control.
In charge of competition policy and EC Vice President, Joaquín Almunia says that: These types of customer interaction apps keep European citizens connected and hence, they 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 analyzed this planned acquisition and concluded that it would not obstruct competition in this active and increasing market. Customers will have a wide choice of consumer interactions apps.