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Facebook's $19 billion WhatsApp takeover bid approved by EU

Facebook's $19 billion WhatsApp takeover bid approved by EU

Many privacy related concerns as a result of the transaction do not fall into the scope of EU competition law

Facebook's US$19 billion bid for WhatsApp won the approval of European Union competition regulator on Friday.

"We have carefully reviewed this proposed acquisition and come to the conclusion that it would not hamper competition," European Commission Vice President in charge of competition policy, Joaquín Almunia, said.

But while the Commission did look into the potential problems of the merger putting ever more data about users in one place, it only considered how that could hamper competition in the online advertising market. "Any privacy-related concerns flowing from the increased concentration of data within the control of Facebook as a result of the transaction do not fall within the scope of EU competition law," it said.

Almunia said he wasn't concerned about Facebook merging Whatsapp's user base with its own: "While Facebook Messenger and WhatsApp are two of the most popular apps, most people use more than one communications app," he said, adding that consumers will continue to have a wide choice of communications apps. In addition, the Commission said, there was a broad overlap between the two user bases.

The Commission also found that Facebook Messenger and WhatsApp are not close competitors, even though they both allow consumers to communicate by sending text, photo, voice and video messages.

Users seem to use the two apps in different ways while many of them use the two apps simultaneously on the same mobile handset, the Commission said. Furthermore, it is a dynamic market with several competing apps available, such as Line, Viber, iMessage, Telegram, WeChat and Google Hangouts, it added.

Facebook expects to close the deal by the end of this year, it said in a July filing with the Securities and Exchange Commission.

Loek is Amsterdam Correspondent and covers online privacy, intellectual property, open-source and online payment issues for the IDG News Service. Follow him on Twitter at @loekessers or email tips and comments to loek_essers@idg.com


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