Facebook/WhatsApp
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1
Introduction
WhatsApp
Facebook
Consumer communication application
market
Consumer communication application
market + Social network market and
advertising on internet market
50 employees (2013)
6000 employees (2013)
20 million $ turnover
7,8 billion $ turnover
Amount of the transaction : 19 billion $
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Introduction
Union dimension?
 Art. 1 Merger Regulation
 Art. 4(5) OK
 Cyprus
 Spain
 UK
 Relevancy of the turnover threshold in the digital economy?
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3
Decision of the
Commission
3 relevant markets:
1. Consumer communication services
2. Social networking services
3. Online advertising services
NB: Market shares are less relevant in the digital economy
Focus on other criteria
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Consumer communication
services market
 Market definition
 “multimedia communication solution that allow people to reach out to
their friends, family members and other contacts in real time”
 Narrowest relevant market: consumer communication apps for
smartphones
 Competitive assessment
 3 steps in the reasoning
• Closeness of competition
• Consumer’s ability to switch providers
• General barriers to entry and expansion
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Social networking
services market
 Market definition
 “services which enable users to connect, share, communicate
and express themselves online through a mobile app”
 Are communication apps within the boundaries of this market?
 Competitive assessment
 Competitive landscape
• Significant number of service providers
• Interchangeability
• High degree of differentiation
 Not close competitors (different focus as regards functionalities)
 Possible integration?
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Online advertising
services market
 Market definition
 Distinction between online and offline advertising
 No further segmentation within the online advertising market
 Competitive assessment
 Only Facebook is active on this market → no horizontal overlaps
 Possible use of WhatsApp users’ data by Facebook?
• WhatsApp does not collect user’s data
• What about the future?
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7
Change in the privacy
settings
2014
August 2016
No change
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- Facebook disposes of the phone numbers
- Companies can send messages to WA users
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Critical assessment - Debate
 The Commission could have gone further in its assessment
(Phase 2?)
 Market definitions
 Importance of the network effects
 …
 Other thresholds (article 1 Merger Regulation) ?
 Data?
 Amount of the transaction?
 Number of users?
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