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EU OKs Facebook/WhatsApp deal, despite threat of American telecoms takeover

The European Commission has approved Facebook’s $19 billion purchase of the messaging service WhatsApp, despite fears the US giant social network will kill competition in the EU market.

The increasing influence of American competitors has been concerning Europe’s domestic telecom companies, which have taken a stand against the merger.
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European telecom operators lobbied against the idea and warned of the dangers of a behemoth creating an unfair advantage.

After its investigation the Commission found that Facebook and WhatsApp are “not close competitors” and therefore won’t eat up other telecoms’ business, the statement, released by the European Commission on Friday, said.

The competition law mandates companies that want to merge must first receive authorization from the relevant government authority, which in this case is the European Commission.

“Although consumer communications apps are characterized by network effects, the investigation showed that the merged entity would continue to face sufficient competition after the merger,” the statement said.

“We have carefully reviewed this proposed acquisition and come to the conclusion that it would not hamper competition in this dynamic and growing market,” Commission Vice President in charge of competition policy, Joaquin Almunia, assured.

The opponents of the deal also cited data privacy as a concern, but the statement said that such concerns “do not fall within the scope of EU competition law.”

In February Facebook acquired the messaging application WhatsApp for $19 billion. In April, the US Federal Trade Commission (FTC) gave the deal the green light.

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