Facebook WhatsApp Deal: EU Sends Questionnaire To Rivals Over Multi-Billion Dollar Acquisition

Antitrust officials at the European Union have sent a fresh set of questions to competitors and users of Facebook Inc. (NASDAQ:FB) and the messaging service WhatsApp, in an attempt to understand the distinction between a social network and a messaging application. The move could potentially challenge Facebook's $19 billion acquisition of WhatsApp.

The questionnaire, which was likely sent to telecommunications operators, social-networking sites and other Internet service providers, will also help explain the growing competition in the industry, the Wall Street Journal reported. The European Commission, the EU's antitrust body, has a provisional deadline of Oct. 3 to clear the merger. The massive deal could be blocked if the regulators decide that it could harm competition in the EU's common market, the Journal reported.

The latest questionnaire, which is nearly 70 pages long, is considered unusual and is expected to make the Facebook-WhatsApp merger vulnerable, according to an EU antitrust lawyer, who told the Journal that the deal “highlights [the merging parties'] soft underbelly.”

In one of the questions, the rivals are asked to draw distinctions “between services primarily designed to enable users to keep in touch with their existing friends / relatives as opposed to services primarily designed to enable users to enter into contact with new people.”

In addition, the questionnaire contains queries on how Apple Inc.'s (NASDAQ:AAPL) iMessage, WhatsApp, Twitter and other services have almost replaced traditional electronic communications services, such as voice calls, SMS, MMS and emails.

The questionnaire, which companies are required to complete by Sept. 8, also raises concerns about the safety of consumers’ data when two entities merge, and how it could affect advertising services in targeting their ads through products such as smartphones and computers.

“In your view, what would be the likely impact on WhatsApp and its user base if post-transaction WhatsApp… were to start collecting increased amount of data about its users (e.g. user location, age, gender, message content, etc.)?” one question asks.

The European Commission had sent the first questionnaire to many technology companies in July, before it was officially notified of the Facebook-WhatsApp acquisition on Aug. 29.

Meanwhile, Europe's telecom industry has raised its voice against the deal, claiming that companies such as WhatsApp leverage the industry’s infrastructure while enjoying tax exemptions. Some European politicians have also recently accused U.S. technology companies of seeking to gain control over Europe's digital economy.