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Facebook's WhatsApp deal gets regulatory OK in Europe

With FTC approval granted in April, the approval in Europe means the deal should finally wrap up soon.

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Facebook has received the thumbs-up in Europe to acquire messaging app WhatsApp.

The $19 billion takeover of WhatsApp is the biggest in Facebook's history and received approval in Europe seemingly with little concern that the company and its apps might pose problems for the competition, Reuters reported Friday.

"Consumer communications apps keep European citizens connected and are becoming increasingly popular," European Competition Commissioner Joaquin Almunia said in a statement. "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."

The European Commission also found that Facebook Messenger and WhatsApp are not close competitors. Further, even though Facebook Messenger is a standalone app, it requires a Facebook account and Facebook integration.

"Users seem to use the two apps in different ways and many of them use the two apps simultaneously on the same mobile handset," the EC said. "Furthermore, this is a very dynamic market with several competing apps available on the market, such as Line, Viber, iMessage, Telegram, WeChat, and Google Hangouts.

But WhatsApp has had its eye on more than just mobile messaging. The company reportedly plans to add free voice calling services to its app later this year, which could present a thorn in the side to European telecom firms such as Deutsche Telekom, Orange, and Telecom Italia, Reuters said. However, the EC didn't address this potential issue in its statement.

Meanwhile, Yahoo confirmed Friday that it has acquired the startup MessageMe, a service similar to WhatsApp. It will be shutting down the service, but MessageMe's eight members will join the company to work on on mobile communications products for Yahoo.

Yahoo also is reportedly in talks to invest in the popular messaging app Snapchat, drawing on the multibillion-dollar cash haul it got from last month's market debut of the e-commerce giant Alibaba.

The Facebook-WhatsApp deal had already received approval from the Federal Trade Commission this past April. But the FTC was more concerned about the arrangement, at least when it comes to privacy. Along with its approval, the agency included a letter cautioning both Facebook and WhatsApp that they continue WhatsApp's policy of not collecting usernames, locations, email address, or other data, and that the company not share users' phone numbers with third parties.

"We want to make clear that, regardless of the acquisition, WhatsApp must continue to honor these promises to consumers," Bureau of Consumer Protection Director Jessica Rich wrote. "Further, if the acquisition is completed and WhatsApp fails to honor these promises, both companies could be in violation of Section 5 of the Federal Trade Commission (FTC) Act and, potentially, the FTC's order against Facebook."

Both Facebook CEO Mark Zuckerberg and WhatsApp CEO Jan Koum said that WhatsApp's privacy policies would remain the same. But the FTC vowed to keep an eye on the two just to be sure.

"Hundreds of millions of users have entrusted their personal information to WhatsApp," Rich told Facebook and WhatsApp. "The FTC staff will continue to monitor the companies' practices to ensure that Facebook and WhatsApp honor the promises they have made to those users."

Europe traditionally takes a strong stance on the privacy of its citizens, but concerns over privacy didn't play much of a role in the Facebook-WhatsApp deal.

"In the context of this investigation, the Commission analysed potential data concentration issues only to the extent that it could hamper competition in the online advertising market," the EC said in its statement. "Any privacy-related concerns flowing from the increased concentration of data within the control of Facebook as a result of the transaction do not fall within the scope of EU competition law. Based on the above, the Commission therefore concluded that the transaction would raise no competition concerns."

With approval from both the US and Europe in place, the acquisition should now be able to go through without any obstacles. The deal is expected to close sometime in the next few months.

Commenting on the EC's regulatory approval, a Facebook spokeswoman told CNET that "we are pleased to have received clearance from the European Commission and look forward to closing the acquisition."