Facebook’s acquisition of WhatsApp has been given the all-clear by the European Union Commission responsible for giving such approval. This means the company can go ahead with its plans.
“We have carefully reviewed this proposed acquisition and come to the conclusion that it would not hamper competition in this dynamic and growing market. Consumers will continue to have a wide choice of consumer communications apps”
Joaquín Almunia, the EC Vice President in charge of competition policy, said in a statement.
WhatsApp had over 450 million users at the time Facebook Inc acquired it compared to 1.23 billion active users on the social network company. The acquisition cost at the time was $19 billion, which drew the attention of the world to the reason behind the decision to acquire it at the time it did.
A lot of questions were raised on Facebook’s motives for acquiring the message app with a lot of people believing that the social media company was going to kill WhatsApp with ads; a claim the company refuted.
In giving its approval, the Commission did not see anything wrong in the acquisition since both entities will ‘continue to face sufficient competition after the merger.’
According to the Commission’s Vice President in charge of competition policy, Joaquín Almunia; “Consumer communications apps keep European citizens connected and are becoming increasingly popular. While Facebook Messenger and WhatsApp are two of the most popular apps, most people use more than one communications app. We have carefully reviewed this proposed acquisition and come to the conclusion that it would not hamper competition in this dynamic and growing market. Consumers will continue to have a wide choice of consumer communications apps.”
Facebook Acquired WhatsApp earlier in the year, after doing the same with Instagram in 2012.
According to the arrangement at the time, Facebook was to pay WhatsApp $4 billion in cash and $12 billion in stock. The founders and staff will be eligible for another $3 billion in stock grants to be paid out if they remain employed by Facebook for four years. Koum will also join Facebook’s board of directors.
Though, the approval given by the European Commission was highly expected to go through, there is no doubt it would mark a significant landmark for the future of the social media giant in Europe as well as other parts of the world.
WhatsApp is an application that allows its users to connect to other users through their mobile phone numbers.