The fact that Whatsapp, the infamous online chat app has been bought by Facebook is something old.
What’s new is that Facebook has asked the European Union to actually check on the USD19 billion purchase. Why? Well, the deal is done in America but the acquisition of Whatsapp by Facebook is moving a little slower in Europe. To hurry things up in their favor, Facebook did what most would think is.. unusual. The social network has actually actively and very enthusiastically sought an investigation by the European Commission. The down side? The company will obviously be poked, probed, questioned by commissioners around the globe. The up side? If all goes well, Facebook really just by passed getting the approval of each of the 28 or so member states of the European Union. Hence, moving things along in a quicker pace.
The Commission and Facebook have both declined to comment about the matter at hand. But this step taken by Facebook may have been brought about by the reluctant European carriers who worry that if they approve, Facebook will basically become a monopoly – controlling instant messaging. It would in their opinion, give Facebook a very favorable and dominant market position.
By applying for a review, Facebook has effectively simplified a rather complicated process. According to Thomas Graf, a Brussels-based antitrust lawyer for Cleary Gottlieb Steen & Hamilton, this option of applying for a review is actually quite common contrary to popular belief because any company would opt for one centralized procedure rather than have different procedures applicable to different member states. However, for the Commission which is the executive and regulatory branch of the Union to get involved, the social network typhoon needs to provide evidence that it’s currently already undergoing review in three of the member states.
Whether this is so nevertheless remains unclear. However, whether this investigation makes things easier for Facebook or harder is yet to be seen. The social networking giant either made a very smart move or a very self harming one.