Facebook Inc (FB), WhatsApp Deal Questioned By EU Watchdogs

Updated on

Facebook Inc (NASDAQ:FB) and WhatsApp deal might face a new challenge as the European Union antitrust officials have sent a detailed questions to the competitors and customers of the social networker and WhatsApp. The efforts are being made to understand the difference between a social network and the messaging application, and to get an insight into the competition scenario, according to the Wall Street Journal.

Facebook Inc (FB), WhatsApp Deal Questioned By EU Watchdogs

70-page long questionnaire

The questionnaire asks the users about the telecommunications operators, social networking sites and other Internet service providers, which according to the European commission are competitors and customers in at least one of the markets where Facebook and WhatsApp operate. The questionnaire is 70 pages long, which is unusual raising doubts over the merger. According to one EU Antitrust lawyer, “It highlights [the merging parties’] soft underbelly.”

There was no comment from the European watchdog, Facebook Inc (NASDAQ:FB) as well as WhatsApp, when asked about the rather unusual development, says the Journal. Back in April, Federal Trade Commission (FTC) gave a green signal to Facebook for the acquisition of WhatsApp, and at same time warned that the later will be subject to Facebook Inc’s 2012 agreement with the FTC. Under the FTC agreement the social networking site is required to convey its customers through a notice before sharing any private information, and also maintain the privacy of consumer’s information.

Facebook WhatsApp deal, in trouble?

European Commission came up with the questions after Facebook Inc (NASDAQ:FB) and WhatsApp officially informed the European antitrust body about the deal on August 29th. Back in May, Facebook sat with the European Commission to review the blockbuster deal even though WhatsApp lacked enough revenue to trigger the 28-nation bloc’s merger law.

The final decision over the case should be taken by October 3. European antitrust regulators usually have 25 working days, to come up with a decision, after a proposed agreement has been conveyed. If, for any reason, regulators cannot unify on the deal, then it would be a failed deal.

European telecom industry raised a concern that apps such as WhatsApp use Telecom Company’s network infrastructure, but are free from similar taxation or regulations.

Signup to ValueWalk!

Get the latest posts on what's happening in the hedge fund and investing world sent straight to your inbox! 
This is information you won't get anywhere else!