In the latest EU approval battle between Facebook Inc (NASDAQ:FB) and telecom operators, Facebook Inc (NASDAQ:FB) is likely to get an unconditional approval for its acquisition of WhatsApp for $19 billion.
The acquisition of WhatsApp will help Facebook Inc (NASDAQ:FB) move ahead in the competitive mobile market while inheriting 450 million customers of the mobile app. The announcement under which WhatsApp planned free voice call services for its customers stemmed the whole problem and made it a potential competitor of telecom companies including Deutsche Telekom AG (ADR) (OTCMKTS:DTEGY), Telefonica S.A. (ADR) (NYSE:TEF), and Telecom Italia SpA (ADR) (NYSE:TI).
In support of this acquisition Facebook Inc (NASDAQ:FB) convinced the commission that the merger will not have any anti-competitive effect. According to Tobias Caspary, Fried Frank law firm, the deal doesn’t raise any competitive scenario as per the commission and he further added,
“Both parties are offering their services for free. It seems unlikely that customers are locked in with respect to instant messaging, and it would be relatively easy to switch to alternative offers, for example Skype or Line.”
On the contrary, WhatsApp has received a green light from the U.S. regulators and the regulators asked the app to stick to its current privacy practices with the provision to avoid using user’s personal data for advertisement purposes. The EU commission is likely to public its decision before October 3, 2014.
All the mobile messaging platforms including WhatsApp, Viber, WeChat, and KakaoTalk present a strong competition in front of the telecom industry, which recorded revenues of $120 billion last year, as per Ovum Market research firm.
Earlier, Facebook Inc (NASDAQ:FB) asked antitrust regulators in EU to review and approve its acquisition of WhatsApp.
This article has been written by Prakash Pandey and edited by Serkan Unal.
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