Facebook’s WhatsApp Deal Faces Review by EU

  • Ben Feinstein
  • May 28, 2014
  • 0
Facebook's WhatsApp Deal Faces Review by EU

Facebook's WhatsApp Deal Faces Review by EU

Facebook is one of the giant corporations right now that has been snatching up other tech and social media companies like it’s going out of style. Though their acquisition of WhatsApp is no longer breaking news, the social networking giant is waiting on European Union courts to review whether or not it has violated antitrust laws. Facebook has actually taken the initiative to ask the court to review the $19 billion deal as a means to save the time of having each individual country review the matter.

The commission that Facebook has approached will most likely take a more neutral stance, while going country by country is feared to stir up local and national telecom companies who see the WhatsApp purchase as a threat to their profits. These companies would argue that WhatsApp would give Facebook a dominant presence in the market for text and picture messaging.

The EU was not expecting to have to deal with this case, as the purchase of WhatsApp was not seen to dramatically increase Facebook’s revenue. Facebook however took advantage of a provision in the legislation  in order to avoid potential complications in the future. National Authorities will have 15 days to voice opposition to the EU takeover, and if they don’t than a EU commission will review the request.

Facebook is already facing tax investigations in France, so this move may also be their attempt at showing a good face. The U.S. Federal Trade Commission has already approved the purchase, but warned Facebook that they must disclose to users notice and obtain consent before sharing information if it extends beyond its current privacy agreement. Many European telecom executives believe that Facebook is competing with an unfair advantage, and that the deal threatens their businesses. They believe that legislation needs to change. They better act quickly though, they only have 15 days to object.

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