Facebook closes $19B deal for WhatsApp

The closing of the deal follows last week's regulatory approval from the European Commission.

Lance Whitney Contributing Writer
Lance Whitney is a freelance technology writer and trainer and a former IT professional. He's written for Time, CNET, PCMag, and several other publications. He's the author of two tech books--one on Windows and another on LinkedIn.
Lance Whitney
2 min read

Facebook has promised that WhatsApp will remain a separate entity. CNET

Facebook now officially owns messaging app WhatsApp.

On Monday, the social network confirmed the closing of the deal in a document filed with the US Securities and Exchange Commission. The document confirms that WhatsApp will live on as a wholly owned subsidiary of Facebook and that WhatsApp co-founder and CEO Jan Koum will become a member of Facebook's board of directors.

On February 19, Facebook revealed that it planned to pay $19 billion in cash and stock to acquire the popular messaging app, the largest deal in the company's history. As part of its attempt to win regulatory approval, Facebook promised that WhatsApp would remain a separate entity. The deal still raised privacy concerns from the Federal Trade Commission.

Though the FTC granted approval, the agency cautioned both Facebook and WhatsApp to 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.

Facebook CEO Mark Zuckerberg and Koum promised that WhatsApp's privacy policies would stay the same. But the FTC said it would keep a watchful eye on the two just to be sure.

"Hundreds of millions of users have entrusted their personal information to WhatsApp," Bureau of Consumer Protection Director Jessica Rich told Facebook and WhatsApp in a letter in April. "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."

WhatsApp did not immediately respond to a request for comment.

In contrast, the deal virtually sailed through regulatory approval from the European Commission, which didn't focus on privacy-related issues and instead dealt more with the potential competition posed by Facebook Messenger and WhatsApp.

"While Facebook Messenger and WhatsApp are two of the most popular apps, most people use more than one communications app," European Competition Commissioner Joaquin Almunia said in a statement last week. "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 EC called the area of mobile messaging a dynamic market and cited several competing products, such as Line, Viber, iMessage, Telegram, WeChat and Google Hangouts. And that market continues to prove appealing to companies who want a stake in the action. Yahoo said last Friday that it acquired MessageMe, a service similar to WhatsApp, and it's reportedly in talks to invest in the popular messaging app Snapchat.

Facebook shares are down around .3 percent to $77.20 on Monday morning.