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Comment by nicoburns | Hacker News Reader

It's such a shame that Facebook was allowed to buy WhatsApp (and Instagram). WhatsApp itself seems truly pro-privacy, but that counts for diddly-squat when it's owned by Facebook.

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What do you mean 'allowed' (Im not being snarky, honestly curious please take the question as not an attack)? The creators just sold it, private company, private service they could have sold it to anyone they wanted. I think in hindsight they regret selling it to FB, but it's really hard to turn down billions of dollars.

M&A is regulated, it's not a totally free market. If company A buys company B, the government allowed them to do so. There are plenty of scenarios where they won't.

I agree with that but a independent messaging app seems perfectly safe for FB to purchase. Instagram a little different but I never saw the government being concerned or potentially not allow this one to go through. That is why I was curious about the OPs perspective because maybe they did see something (not counting hindsight and that FB is a terrible company, but only in the moment)

It's simple: OP's perspective is that even though the purchase was not stopped, it should have been. That to you it seemed a perfectly safe purchase is completely irellevant to his argument.

I would like to know why he thinks it should have been stopped. At the time of that purchase I think any messaging platform could have been sold to anyone and not been stopped (imo).

Again, it's simple: he says it should have been stopped, not that it could have been stopped. Or you could read it as "in a better system, this purchase would have been seen as anticompetitive and stopped". I happen to agree with the sentiment.

> he says it should have been stopped,

Again, I ask why. It wasn't anti-competitve because the service still exists as a standalone service just with a different owner. I see what you are saying it just does not make any sense in terms of antitrust or anti-competitiveness

It's not really standalone. The privacy implications are case in point. Facebook is a vehemently anti-privacy company, and it's not going to allow WhatsApp to undermine on this point. If WhatsApp (or indeed Instagram) were truly independent then we may well see competition on this front.

Have you heard about antitrust laws? https://en.wikipedia.org/wiki/United_States_antitrust_law

These types of laws exist to prevent monopolies being created after a M&A.

Whatsapp's acquisition was in fact investigated and approved both by relevant commissions in US and EU: https://en.wikipedia.org/wiki/United_States_antitrust_law

Right but I didnt see anything in this acquisition that would trigger antitrust (WhatsApp only, I did see issues with Instagram). And independent messaging app that didnt have ads seems like a safe purchase from a legal standpoint. That is why I asked the OP why he was surprised it was allowed.

(I'm not the above commenter but also disagreed with your prior comment)

> The creators just sold it, private company, private service they could have sold it to anyone they wanted.

I understand and agree with your take now, but this sentence from your last comment seemed like a different line of thinking.

If a creator can just sell it to anyone because it's a private company, that's false and that's a different argument than the specifics of this case not triggering antitrust law.

WhatsApp being bought by Apple could have easily been construed as anticompetitive, so it wasn't just that a creator can sell a private company to anyone they want. (Also, Facebook Messenger could be a reason that Facebook's purchase of WhatsApp is anticompetitive, but neither service was as prevalent at the time).

Makes sense I should have been more clear (also why I said I wasnt trying to be snarky because I could easily read my first comment as such). I think at the time this sale happened any messaging service could have been sold to any company without government stoppage. The anti competitive guidelines are as such:

    - agreements between competitors, also referred to as horizontal conduct  
  
   - monopolization, also referred to as single firm conduct

I think this sale would still go through today as for FB still has messenger and Whatsapp as separate products and (arguably) still free. I havent thought about it Apple purchased it. I think that still may have gone through too unless they stopped the app working on Android.

I agree with you that the sale doesn't come under current anti-trust laws. My position is that there ought be broader market health protections that allow for intervention in cases such as these on the basis that the reduced competition is detrimental to society / consumers even though it doesn't constitute a monopoly and may not be intentionally anti-competitive.

The thing is that facebook buying whatsapp was clearly an anti-competitive move, the same way as when they bought instagram.

WhatsApp wouldn't exist today (at least not at the current scale) had Facebook not bought it. They have operated for over a decade now, serve 2 billion users, and have made close to zero revenue the entire time.

That's not true. They were charging $1/user/year (possibly only on Android and in some countries) before their acquisition. And their costs were low. I'm pretty sure they were profitable.

Nope. Facebook disclosed their numbers in the acquisition filings. E.g. from https://www.investopedia.com/articles/investing/032515/whats... –

> WhatsApp’s six-month revenue for the first half of 2014 totaled $15.9 million and the company incurred a staggering net loss of $232.5 million, though the majority of that loss was for share-based compensation.

WhatsApp was always running on VC cash.

Not true - that loss was based on employee compensation due to the size of the deal and realized stock appreciation. WhatsApp could have covered operating costs indefinitely from user $1 payments.

Let’s be honest, nobody would have paid that $1 (you had a free year before you had to pay IIRC). Everyone would have switched to another free service.

WhatsApp is in a good position to become a "lightweight" Slack competitor, since so many small companies already use it for work.

In my country (Argentina) it became a de-facto platform for selling for small businesses, grocery stores and restaurants. There are a couple of 3rd party e-commerce platforms that generate the order and then simply drop it through WhatsApp so you can continue through there and handle the payment manually.

... There are many ways in which WhatsApp could have explored making profits. Facebook simply made it stagnate.

It doesn't seem to be too relevant: it's the year of acquisition and the loss is due to the "share based compensation". Remembering what I've read, before they were really small company with small number of servers properly handling all the uses.

They dropped that pretty fast. Nobody is going to pay for WhatsApp when other apps offer the same for free.

WhatsApp can actually be monetised successfully by a company like Facebook.

They also had very low costs before the facebook acquisition. They had a very small development team and very low server costs.

Sure, things like adding group video calling massively increased their costs, and they probably couldn't have done it without facebooks help, but without that they probably could have survived on 1 ad message per year, or on $0.50 per year (which they actually charged for a while).

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