Get the most important digital marketing news each day.
Facebook To EU: Please Review Our WhatsApp Deal
Usually, companies don’t want to be subjected to regulatory scrutiny. However this time, it appears, Facebook is actively soliciting antitrust review of its roughly $19 billion WhatsApp acquisition from the European Commission.
As explained in a Wall Street Journal article the strategy appears to be an end run around individual country regulatory authorities, seeking to avoid antitrust investigations in multiple nations.
Facebook has reportedly indicated that it faces potential antitrust review in the UK, Spain and Cyprus. Interestingly, because there are few revenue implications from the deal (despite its $19 billion price tag), Facebook would not likely have met with EU scrutiny absent this request.
National authorities can object to the European Commission handling the review within 15 days. If they do not they’re effectively preempted.
Why this matters — and why it’s a very shrewd maneuver by Facebook — is that at the “local” (national) level individual telecom carriers might strenuously object. That’s because their messaging revenues are threatened by WhatsApp, which has much more usage in Europe and globally than in the US.
At the level of the European Commission individual wireless carriers are likely to have less sway or lobbying influence. However they’re probably going to join together and object to the deal on the grounds that Facebook would become dominant in messaging and thereby threaten to reduce competition long term.
The argument has some teeth, though it’s clearly a case of vested interests petitioning government to try and block disruption and protect revenues.