5 ms·

Given that FB paid $19 Bln for WhatsApp, €110m seems to be a cost of doing business for Facebook. That may be calculated play. USA got very liberal antitrust p

Given that FB paid $19 Bln for WhatsApp, €110m seems to be a cost of doing business for Facebook. That may be calculated play. USA got very liberal antitrust policy, allowing massive M&A. Good for shareholders, bad for everybody else. E.g. the biggest four airlines in USA got over 80% market share. In Europe they just have 48%. That's why United can re-accommodate passenger and get away with it: http://www.economist.com/news/leaders/21721201-americans-are-treated-abysmally-their-airlines-they-should-look-europe-lessons-lack http://www.economist.com/news/leaders/21721201-americans-are...

denzil_correa 9y ago
> Given that FB paid $19 Bln for WhatsApp, €110m seems to be a cost of doing business for Facebook According to Facebook Q1 2017 results, it had ~7.2 Billion EUR revenue and 2.7 Billion EUR as net income. https://s21.q4cdn.com/399680738/files/doc_financials/2017/Facebook-Reports-First-Quarter-2017-Results.pdf https://s21.q4cdn.com/399680738/files/doc_financials/2017/Fa...
antr 9y ago
The fine is not due to any antitrust laws being breached, but because FB mislead authorities by providing incorrect information. > Indeed, the clearance decision was based on a number of elements going beyond automated user matching.
blowski 9y ago
I thought the same thing. It's like having to pay £1 extra on a £200 purchase - sure, just it add it to the bill.
- Bartweiss 9y ago
  I wonder if we could kill the secrecy by just doing this upfront? "Sure, you can have your acquisition. Here's a price sheet for the changes you've requested." Less hide and seek or regulatory expense, you can assess much larger penalties for dishonesty than for up-front admissions, and you can point the fees to something pro-social and help mollify people about Facebook's low tax rate.
  - lovich 9y ago
    We could, but that just turns into a tax on doing the things that society has deemed bad through the government. That's what the current situation is effectively, so what you're suggesting might be an improvement. I would prefer that we make the fines actually painful enough to work as a deterrent however. A percentage based fine is the only way to do so that I can think of since corporations are doing larger and larger deals all the time. If the fine for something like this was say 50% of the purchase price, that should at least cause some hesitation on the corporation's part.
stupidhn 9y ago
>€110m seems to be a cost of doing business for Facebook. Another way of looking at it is that the courts deemed €110m the cost of the misleading information to society, in which case FB pays a fair fine.
- rapind 9y ago
  It should probably serve as a deterrent too no?
pieter_mj 9y ago
>That may be calculated play. My thoughts exactly. The information they gained is worth orders of magnitude more. Also, facebook is not fined for breach of privacy. Userdata can be bought, privacy laws or not, so it seems.
- rhaps0dy 9y ago
  >My thoughts exactly. The information they gained is worth orders of magnitude more. Which information did they gain? The accounts of Whatsapp? If you read the press release, it says that even if the European Commission had known that they could merge the accounts, the decision would have been the same. "Today's decision has no impact on the Commission's October 2014 decision to authorise the transaction under the EU Merger Regulation. Indeed, the clearance decision was based on a number of elements going beyond automated user matching. The Commission at the time also carried out an 'even if' assessment that assumed user matching as a possibility. The Commission therefore considers that, albeit relevant, the incorrect or misleading information provided by Facebook did not have an impact on the outcome of the clearance decision."
  - meowface 9y ago
    Worth it in their minds. They wouldn't have hid it if they didn't think it would somehow impede the merger. It didn't end up being an issue (or at least the Commission claims it wouldn't have), but that could still be thought of as money they set aside for that risk.
briandear 9y ago
What's the Lufthansa market share in Germany? What's the Air France market share in France?
- wayn3 9y ago
  Lufthansa the airline or Lufthansa Group?
- koyote 9y ago
  Here's a good chart illustrating domestic market share in European countries: http://www.anna.aero/2011/02/02/aegean-olympic-merger-denied-due-to-domestic-dominance/ http://www.anna.aero/2011/02/02/aegean-olympic-merger-denied... A part from Air France almost every country's dominating carrier has around 60% or less. And this is for domestic travel only, which is not very extensive due to the smaller size of European countries and the vast reach of high-speed rail. If you look at international travel the main carriers have massive amount of competition from low-cost carriers as well as airlines from other European countries: http://www.anna.aero/wp-content/uploads/2011/03/air-france-3-cht-airline-int-share.png http://www.anna.aero/wp-content/uploads/2011/03/air-france-3...
JumpCrisscross 9y ago
> USA got very liberal antitrust policy European markets are more concentrated than American markets. http://celent.com/reports/too-big-bail-bank-concentration-developed-world http://celent.com/reports/too-big-bail-bank-concentration-de...
oconnor663 9y ago
> the biggest four airlines in USA got over 80% market share. In Europe they just have 48%. But...the US is one country and Europe is...more than one? I get that airlines tend to be international, but in general it seems like we'd expect to see more companies in any given industry across all of Europe, than we'd expect in the same industry in the US. It's double the population, apart from all the borders involved.
dogma1138 9y ago
Europe is made up of multiple countries, most countries keep a national airline even if they have to subsidize it because of its strategic importance. You also not comparing apples to apples in Europe today you have A4E which makes up EasyJet, Ryanair, KLM, Lufthansa, IAG (which owns British Airways, Iberia etc.) and a few others and it controls over 95% of the market share. https://a4e.eu/airlines/ https://a4e.eu/airlines/
jgalt212 9y ago
If the lack of competition in America and its negative effects upon pretty much everyone, but a few oligarchs is getting you down, I suggest getting involved with New America Open Markets. https://www.newamerica.org/open-markets/ https://www.newamerica.org/open-markets/

denzil_correa 9y ago

> Given that FB paid $19 Bln for WhatsApp, €110m seems to be a cost of doing business for Facebook According to Facebook Q1 2017 results, it had ~7.2 Billion EUR revenue and 2.7 Billion EUR as net income. https://s21.q4cdn.com/399680738/files/doc_financials/2017/Facebook-Reports-First-Quarter-2017-Results.pdf https://s21.q4cdn.com/399680738/files/doc_financials/2017/Fa...

antr 9y ago

The fine is not due to any antitrust laws being breached, but because FB mislead authorities by providing incorrect information. > Indeed, the clearance decision was based on a number of elements going beyond automated user matching.

blowski 9y ago

I thought the same thing. It's like having to pay £1 extra on a £200 purchase - sure, just it add it to the bill.

Bartweiss 9y ago
I wonder if we could kill the secrecy by just doing this upfront? "Sure, you can have your acquisition. Here's a price sheet for the changes you've requested." Less hide and seek or regulatory expense, you can assess much larger penalties for dishonesty than for up-front admissions, and you can point the fees to something pro-social and help mollify people about Facebook's low tax rate.
- lovich 9y ago
  We could, but that just turns into a tax on doing the things that society has deemed bad through the government. That's what the current situation is effectively, so what you're suggesting might be an improvement. I would prefer that we make the fines actually painful enough to work as a deterrent however. A percentage based fine is the only way to do so that I can think of since corporations are doing larger and larger deals all the time. If the fine for something like this was say 50% of the purchase price, that should at least cause some hesitation on the corporation's part.

stupidhn 9y ago

>€110m seems to be a cost of doing business for Facebook. Another way of looking at it is that the courts deemed €110m the cost of the misleading information to society, in which case FB pays a fair fine.

rapind 9y ago
It should probably serve as a deterrent too no?

pieter_mj 9y ago

>That may be calculated play. My thoughts exactly. The information they gained is worth orders of magnitude more. Also, facebook is not fined for breach of privacy. Userdata can be bought, privacy laws or not, so it seems.

rhaps0dy 9y ago
>My thoughts exactly. The information they gained is worth orders of magnitude more. Which information did they gain? The accounts of Whatsapp? If you read the press release, it says that even if the European Commission had known that they could merge the accounts, the decision would have been the same. "Today's decision has no impact on the Commission's October 2014 decision to authorise the transaction under the EU Merger Regulation. Indeed, the clearance decision was based on a number of elements going beyond automated user matching. The Commission at the time also carried out an 'even if' assessment that assumed user matching as a possibility. The Commission therefore considers that, albeit relevant, the incorrect or misleading information provided by Facebook did not have an impact on the outcome of the clearance decision."
- meowface 9y ago
  Worth it in their minds. They wouldn't have hid it if they didn't think it would somehow impede the merger. It didn't end up being an issue (or at least the Commission claims it wouldn't have), but that could still be thought of as money they set aside for that risk.

briandear 9y ago

What's the Lufthansa market share in Germany? What's the Air France market share in France?

wayn3 9y ago
Lufthansa the airline or Lufthansa Group?
koyote 9y ago
Here's a good chart illustrating domestic market share in European countries: http://www.anna.aero/2011/02/02/aegean-olympic-merger-denied-due-to-domestic-dominance/ http://www.anna.aero/2011/02/02/aegean-olympic-merger-denied... A part from Air France almost every country's dominating carrier has around 60% or less. And this is for domestic travel only, which is not very extensive due to the smaller size of European countries and the vast reach of high-speed rail. If you look at international travel the main carriers have massive amount of competition from low-cost carriers as well as airlines from other European countries: http://www.anna.aero/wp-content/uploads/2011/03/air-france-3-cht-airline-int-share.png http://www.anna.aero/wp-content/uploads/2011/03/air-france-3...

JumpCrisscross 9y ago

> USA got very liberal antitrust policy European markets are more concentrated than American markets. http://celent.com/reports/too-big-bail-bank-concentration-developed-world http://celent.com/reports/too-big-bail-bank-concentration-de...

oconnor663 9y ago

> the biggest four airlines in USA got over 80% market share. In Europe they just have 48%. But...the US is one country and Europe is...more than one? I get that airlines tend to be international, but in general it seems like we'd expect to see more companies in any given industry across all of Europe, than we'd expect in the same industry in the US. It's double the population, apart from all the borders involved.

dogma1138 9y ago

Europe is made up of multiple countries, most countries keep a national airline even if they have to subsidize it because of its strategic importance. You also not comparing apples to apples in Europe today you have A4E which makes up EasyJet, Ryanair, KLM, Lufthansa, IAG (which owns British Airways, Iberia etc.) and a few others and it controls over 95% of the market share. https://a4e.eu/airlines/ https://a4e.eu/airlines/

jgalt212 9y ago

If the lack of competition in America and its negative effects upon pretty much everyone, but a few oligarchs is getting you down, I suggest getting involved with New America Open Markets. https://www.newamerica.org/open-markets/ https://www.newamerica.org/open-markets/