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  • WhatsApp Acquisition Under Scrutiny
Technology Articles > Social Networking > Facebook > WhatsApp Acquisition Under Scrutiny

You may have heard of Facebook's plans to acquire WhatsApp for a staggering $19 billion back in February. That's a lot of cash – so much so, the Wall Street Journal said the social media king is protecting itself in advance from antitrust backlash by turning all information regarding the deal over to the European Commission, the EU's antitrust experts for scrutiny.

Facebook hopes this prevents other countries from launching pricey investigations and legal battles.

But why would other countries even care? In Europe, the telecom companies feel that Facebook will pin down too much of the market of instant messaging. As it is, these companies noticed a drop in the number of texts sent in the UK as a whole. Add that to the fact new regulations exist regarding roaming and call fees, and it's easy to see why they would be a little worried.

The Deal

Facebook announced the move was to connect the world more completely, and felt WhatsApp was the perfect addition to the family. It already had 450 million active users at the time of the sale, and 70 percent of those users are messaging on the daily. The interesting part of the deal: WhatsApp founder and CEO Jan Koum, who will sit on Facebook's board of directors, assured users there would never be ads at any time.

Why Bring It To The European Commission?

There really isn't a reason, besides the fact Facebook is looking ahead to the future. Each time it brings something new to the table, there are always detractors looking to spoil its fun. And indeed, it's easy to see why some might feel Facebook has an unfair advantage in the world of messaging and staying connected in general. Bringing the issue to the ultimate authority in Europe will help stave off possible threats in the future, effectively saving time and money on legal resources.

The Wall Street Journal reports that it is unknown whether a complaint has already been lodged, which would stall the deal and possibly nix it altogether. Besides telecom companies, regulators might find issues with the deal regarding how it will impact smaller messaging providers. European startups are another worry as various European countries have seen a serious decline in local social networks.

The Waiting Game

European countries and regulators have yet to weigh in on the issue. It remains to be seen which countries have the biggest problem with the merger. However, in Germany, in a seemingly related story, the data protection commissioner of Schleswig-Holstein asked that people find a more secure messaging app than WhatsApp, citing privacy problems. However, WhatsApp assured users that nothing would be different once the acquisition is finalized.

German regulators have been battling with Facebook over privacy concerns for some time now, asking them to follow German laws regarding the protection of user data. Facebook counters with the fact their data processing takes place at its European headquarters based in Ireland, so Germany's regulations shouldn't apply.

Of course, German regulators say that it isn't the fact Facebook is buying the messaging app, it's the fact that they believe WhatsApp is not secure. The commissioner has yet to hear how a security breach is handled.

It isn't clear if any countries have come forward about the deal, or if any of them will appeal any decision made by the European Commission.