Social Media

Facebook seeks EU review of WhatsApp purchase

Facebook has asked the European Union to launch an antitrust review of its $16 billion purchase of WhatsApp, a source familiar with the matter told CNBC Wednesday.

In what can be seen as a pre-emptive strike, the social networking giant requested a review by the European Commission, the EU's executive arm, which could affect its acquisition of the messaging service. The move was first reported in The Wall Street Journal on Wednesday.

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Facebook's request for a review indicates that the terms of its deal to buy WhatsApp raise competition concerns in a number of different European countries. Rather than deal with these issues on a country-by-country basis, Facebook can ask the European Commission to deal with it on the centralized basis.

Duncan Liddell, a partner in competition and EU law at Ashurst law firm in London, said this could have a number of benefits for Facebook.

"There will be logistical issues for Facebook in dealing with different member states. There may also be benefits in terms of a single timetable," he told CNBC.

"Facebook might also think that it would get a more consistent approach if there is just one review of the transaction. The European Commission is in effect a one-stop shop, bringing it under one authority."

The deal, which has been approved in the U.S., is Facebook's largest purchase. In February, the website confirmed it would buy WhatsApp for around $16 billion, including $4 billion in cash and about $12 billion worth of Facebook shares.

If the European Commission does review the deal, and considers that it raises substantive competition concerns, Facebook can offer up remedies at the first stage in the process in an effort to avoid a long-term investigation. If the European Commission does judge that the deal poses a risk to effective competition, it can impose remedies on the companies involved - or in a worst-case scenario block the deal.

Antoine Colombani, the spokesman for Europe's Competition Commissioner, had no comment on the news.