The European Commission confirmed reports it is probing Facebook’s $19 billion (€14.4 billion) acquisition of mobile messaging company WhatsApp, but played down suggestions the move is in any way unusual.
A spokeswoman for the EC’s competition division told Total Telecom that the Commission received notification of the planned merger on Friday (29 August), and that it now has a little over a month to make a decision regarding whether to launch a full investigation or clear the deal. The deadline for the EC’s decision in this case is 3 October.
The spokeswoman noted that European Union Merger Control regulations require an investigation of mergers and acquisitions to ensure the deals do not significantly reduce competition in the region. The regulations state that no merger and acquisition will be cleared if it is deemed likely to impact consumers, for example by creating a dominant company that may raise prices.
While the spokeswoman stopped short of confirming reports in the Wall Street Journal that the EC has sent a near 70-page questionnaire to WhatsApp rivals and telecoms operators regarding the likely impact of the merger, the EU Merger Control regulations reveal that early investigations may include “requests for information from the merging companies or third parties.” That provision suggests there is nothing unusual in the EC’s actions to date.
The Journal noted the Facebook probe is being used as something of a test case by the EC. The questionnaire points to a Commission that is trying to decide the difference between social networks and messaging services, it reported, and could prove instrumental in how the Commission handles future merger and acquisition approval requests from similar companies.
In a separate article, the Journal noted that the EC began sending questionnaires to Facebook and WhatsApp’s competitors and customers several weeks ago, but has embarked on a more thorough round of investigation as part of the formal merger review process.
The U.S. Federal Trade Commission (FTC) granted its approval for Facebook’s acquisition in April, but warned both companies that they must deliver on promises to respect the privacy of their users. The FTC noted that