thursday, 10 july of 2014

EU Wants to Know What Facebook Rivals Think of WhatsApp Deal

EU Wants to Know What Facebook Rivals Think of WhatsApp Deal

While considering a fresh antitrust complaint against Google, Europe’s antitrust cops are about to take a hard look at Facebook.

European Union antitrust officials are reaching out to Facebook rivals to get their thoughts on the company’s proposed $19 billion acquisition of messaging service WhatsApp, reports WSJ:

Officials at the European Commission—the EU’s central competition authority—have in recent weeks sent detailed questionnaires to several major technology and online-messaging firms, asking about the merger’s impact on competition in their markets, according to people familiar with the matter.

The questionnaires also drill down into a relatively new area for merger reviews: how the firms control and use personal data when they offer services, some of the people said.

The questioning of the firms comes ahead of a formal merger review that will be closely watched by antitrust lawyers and technology executives. It could prove to be an important test case of the potential impact of EU competition law on social media and how personal data and privacy might factor into competition reviews.

“This is a bit of a toe in the water for the commission,” a Brussels-based antitrust lawyer told WSJ. “It’s the first time they’ll look at social media seriously in terms of market power issues.”

Market share among mobile messaging apps is one possible flash point. At least two companies that got the questionnaire expressed concerns to the commission that the union of Facebook and WhatsApp would push messaging-app rivals out of the market.

The commission “may look at whether the service is likely to remain practically free” after the merger, said Jose Luis Buendia, a former European Commission antitrust official who works at the law firm Garrigues in Brussels.

Personal data may also come into play. Some lawyers and privacy advocates want the review to consider a novel antitrust argument that casts Facebook as a potential “data monopolist,” acquiring so much data about users that it has an advantage that constitutes a barrier to entry to other companies.

(Published by The Wall Street Journal- July 9, 2014)


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