Facebook’s WhatsApp Takeover to Undergo a Fast EU Review

According to EU Competition Commissioner Joaquin Almunia, Facebook’s planned acquisition of WhatsApp at US$19 billion will undergo a speedy review.

The initial deadline for the European Union regulators is the 3rd of October by which time it is expected that the deal will be cleared. In the event that the process does not run as smoothly as expected, the commission can open an extended four month probe into the transaction to investigate any antirust concerns.

The investigation will deal with privacy concerns, which although not handled directly by EU antitrust or merger rules, potential concerns were raised by one of the 28 EU privacy regulators in February, when the takeover was first announced. The concerns dealt with the data which is collected and stored by companies when WhatsApp software is downloaded on mobile phones.

The acquisition will be the biggest by Facebook so far. The world’s most popular social network is valued at US$192 billion with over 1.28 billion users logging onto the site monthly. WhatsApp, one of the world’s most popular mobile chat platforms has over 600 million active users and was valued at $US19 billion for the acquisition, which is half of the value of the second most popular social network, Twitter. The sum will be paid with US$4 billion in cash, US$12 billion worth of Facebook stock and US$3 billion worth of restricted shares which will be paid out to WhatsApp’s 50 employees over four years. This means that each WhatsApp employee will receive about US$380million worth of stocks. That’s quite a milestone for an up to five-year career at the company which was founded in 2009 by two former Yahoo employees, Brian Acton and Jan Koum.

The acquisition as well as the success of both companies involved is proof that the information age has made building high-value businesses quicker and simpler than ever before. In addition, global communication has been made faster and widely accessible. Some users are concerned by Facebook’s expanding access to online and mobile private data.

Although the availability of this information may aid law enforcement in the future, the side-effect is that our private lives are becoming increasingly public and open to corporate manipulation. Nevertheless, according to the EU, the merger is not the most difficult they have had to deal with and should go through without any hindrance.