Facebook, WhatsApp sit on cold steel table as Euro Commish ponders painful probe
Your hospital gowns are gaping, chaps
Rivals of Facebook and WhatsApp have been asked to complete a whopping 88 multiple-choice, multi-part questions that range from the blindingly obvious – “To the best of your knowledge, do users use more than one social networking service?" – to the vague and indefinable – “Please provide any recent examples of consumers switching from one social networking service to another.”
That’s just a taste of the list of posers sent to the social network and comms app's rivals as the European Commission's competition branch considers whether or not to launch an investigation into a proposed takeover.
The questionnaire is the first step towards launching a formal investigation. If the Commission’s Competition department thinks that there would be a negative effect in the markets for consumer communications services, social networking services and online advertising, it could hold up any deal while it investigates further and could ultimately block it.
Questions 45 and 46 get to the nub of the matter: “As a result of the Facebook/WhatsApp transaction, do you expect the users of WhatsApp to face greater difficulties in switching to another consumer communications service/app? Do you expect that post-transaction there will remain sufficient alternative providers of consumer communications services/apps?
However many of the questions such as “In your opinion, how easy (in terms of time, cost and convenience) is it for consumers to start using a new social networking service?” seemed to have been pulled from an old telco questionnaire.
It seems the Commission is attempting to define a new market it is not familiar with as well as distinguish between social networks and communications tools: “In your view, is it appropriate to distinguish social networking services/apps according to any other segmentation, based on their use by customers?” (In other words: “Help, what should we call this?”)
The Commission is also trying to work out whether an app or service offered on multiple operating systems is a single or multiple product.
Rivals are also asked to list the five strongest providers of consumer communications services, identify which functionalities of Facebook Messenger and WhatsApp users predominantly use and whether they are interchangeable with other voice, video and messaging services as well as to sum up what it means for competition:
"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?"
The US Federal Trade Commission waved through the deal in April with a short caveat about giving users notice about any alterations to their privacy settings.
Facebook then asked the European Commission to look at the merger in May, despite WhatsApp being insufficiently large to trigger a formal examination. Presumably Facebook wants to head off a possible 28 different competition investigations in member states.
Companies have until 8 September to fill in the headache-inducing questionnaire and the Commission has said it will give some sort of response – be that an extension to the preliminary probe or the launch of a full investigation – by 3 October. ®