EU blesses $19bn Facebook-Whatsapp marriage
Yet it's not bothered about user privacy worries
The European Commission has approved the merger of Facebook and WhatsApp, ruling they are not close competitors – despite both offering free online messaging.
After sending out lengthy questionnaires to the pair's rivals, the commission gave the nod to the proposed deal. Competition chief Joaquín Almunia explained: “While Facebook Messenger and WhatsApp are two of the most popular apps, most people use more than one communications app."
The difference between the two services was also a factor in the decision. Facebook users must set up a profile and typically use the whole social networking site, whereas Whatsapp users only use the app on a mobile.
The commission said that consumers would continue to have a wide choice of alternative consumer communications apps after the transaction listing competitors such as Line, Viber, iMessage, Telegram, WeChat and Google Hangouts.
However Christian D'Cunha, legal officer at the European Data Protection Supervisor's office, said the decision ignores privacy concerns and market reality.
Users sign up to Facebook and Whatsapp on the basis of markedly different privacy policies. Whatsapp users are entitled to expect reassurances that their personal data – and those of their friends and family in their contacts - will continue to be processed in accordance with the letter and the spirit of the original terms.
It's worth noting that earlier this year in the US the FTC (while approving the merger) warned both companies that it would hold them to account for their promise that the merged company would not use WhatsApp users' personal data for targeted ads.
It will be deeply disappointing to consumer and privacy advocates that EU's regulator did not see fit to do at least as much.
That market reality in the consumer communications apps market involves so-called “network effects” where the value of the service to its users increases with the number of other users. That is certainly the case with both Facebook and Whatsapp, but the Commission said in its statement that the sector is fast growing and “characterised by short innovation cycles in which market positions are often reshuffled”.
“Moreover, launching a new app is fairly easy and does not require significant time and investment. Finally, customers can and do use multiple apps at the same time and can easily switch from one to another,” continued the Commission.
The Commission said that any privacy-related concerns flowing from the increased concentration of data within the control of Facebook was not within the scope of EU competition law. ®