Saturday 25 October 2014

EU seeks rivals' feedback on Facebook, WhatsApp deal

Published 02/09/2014 | 09:01

The Facebook and WhatsApp applications' icons are displayed on a smartphone on February 20, 2014 in Rome. The deal unveiled the day before worth up to $19 billion -- seen as the largest for a venture-backed tech startup -- gives Facebook entry into emerging markets and importantly keeps the app out of the hands of rivals like Google. US stocks rose modestly in early trade today as investors slammed Facebook's huge acquisition of WhatsApp and Wal-Mart Stores turned in disappointing earnings for the holiday season. AFP PHOTO / GABRIEL BOUYS        (Photo credit should read GABRIEL BOUYS/AFP/Getty Images)
The Facebook and WhatsApp applications' icons are displayed on a smartphone on February 20, 2014 in Rome. The deal unveiled the day before worth up to $19 billion -- seen as the largest for a venture-backed tech startup -- gives Facebook entry into emerging markets and importantly keeps the app out of the hands of rivals like Google. US stocks rose modestly in early trade today as investors slammed Facebook's huge acquisition of WhatsApp and Wal-Mart Stores turned in disappointing earnings for the holiday season. AFP PHOTO / GABRIEL BOUYS (Photo credit should read GABRIEL BOUYS/AFP/Getty Images)
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EU antitrust regulators are asking Facebook's rivals and telecoms operators whether its proposed $19bn bid for mobile messaging startup WhatsApp will lead to price hikes and curb innovation.

The move came after Facebook sought EU approval for the deal, the largest in its 10-year history, which will give the world No. 1 online social network's a strong foothold in the fast-growing mobile messaging market and pit it against telecoms companies.

The European Commission has said it will decide by October 3 whether to clear the deal unconditionally, demand concessions or extend the preliminary review into a wider probe.

In a questionnaire seen by Reuters, the EU regulator asked if the deal would have a negative, neutral or positive impact on users and customers in mobile messaging and social networks.

"If negative, please explain why and what kind of negative impact (for example price increase, deterrence of innovation, etc)," the document said.

The Commission also asked if mobile messaging services could substitute traditional voice calls, text messages and emails. It wanted to know whether Facebook advertisers would be able to switch to another type of advertising in the event of a price increase.

Third parties were asked whether users and rivals would face problems as a result of the deal.

"As a result of the Facebook/WhatsApp transaction, do you expect users of WhatsApp to face greater difficulties in switching to another consumer communications service/app?" the questionnaire asked.

"As a result of the Facebook/WhatsApp transaction, do you expect that it will be more difficult for WhatsApp's competitors to expand their user base or to launch a new consumer communications service/app in the European Economic Area?"

Facebook expects to close the deal this year. US regulators cleared the takeover in April, telling WhatsApp to stick to its current privacy practices after the merger, including not to use users' personal data for targeted ads.

Reuters

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