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Monday, October 20, 2014

EU’s Traditional Analysis of the Facebook, WhatsApp Deal

The EU’s Traditional Analysis of the Facebook, WhatsApp Deal – Do We Like it?: "Yet the Commission appears to have analysed this case as if the markets involved were just the same as any traditional services market, focusing on actual horizontal competitive services as the key to determining whether the acquisition could impact competition.  In consumer facing digital markets, with huge operators already holding key market positions, access to large databases of personal information based on networks of hundreds of millions of users probably represents the price of critical market entry (ie the type of entry that could really pose a competitive threat to the status quo).

Combinations of large networks which, at the point of merger, are only distant competitors of consumer facing services may, due to the information they hold or their ability to collect such information, be potential competitors of extraordinary potential force. If entities spend years creating those conditions (supported by minimal income), only so that they can be sold off to powerful incumbents before they use the base created to start to compete, how will a truly competitive market emerge? When billions of dollars are paid for a business which has a relatively modest income stream, what might the strategic objective of the acquirer really be?" 'via Blog this'

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