A Bloomberg report said experts believed that Facebook's acquisition of WhatsApp, a popular messaging service provider, will not be viewed by antitrust regulators as a threat to competition due to the dynamism of the mobile applications market.
In an interview, New York University School of Law professor Harry First said in an interview, "It seems like a stretch to me to find some kind of competition issues. This is not the only message-sharing app for free. How hard is it to start up another one?"
Facebook is set to acquire the Mountain View, California-based startup for a whopping $19 billion, arguably one of the biggest bets in the mobile services industry. The social media giant is reportedly counting on mobile applications that would expand its business and secure significant market share to smartphone and tablet users.
On the other hand, the $2 billion breakup fee was a curious addition to the merger agreement. First told Bloomberg, "The breakup fee is huge. What are they worried about? The only thing I can think might be a potential problem is what the future plans are to invade each other's turf."
Bloom Strategic Counsel founder Seth Bloom in Washington, who is also an ex-general counsel of the US Senate Antitrust Subcommittee said that antitrust regulators will be studying the extent of the competition between Facebook's own mobile application, Facebook Messenger, and the service provided by WhatsApp and check whether Facebook will have undue control over the messaging market as a result of the acquisition. Nonetheless, Bloom believed that regulators' review of the merger would not be that stringent as compared to reviews done on other high-profile mergers and acquisitions.
Telling Bloomberg in a phone interview, he commented, "The thing about this market is there is rapid technological change and frequent new entry. It's hard to say anybody has a durable market share."
