WHATSAPP, MARK?
Document trove seen as fresh FTC ammo
In the months before acquiring WhatsApp in 2014, Facebook execs described the messaging service and others like it as a threat to the company’s core business, offering potential evidence to regulators in the US and Europe that are pursuing antitrust probes into the social-networking company.
In a trove of internal Facebook documents, including email chains and presentations, Chief Executive Mark Zuckerberg and other top execs repeatedly called messaging apps including WhatsApp a threat to Facebook and to its own chat app, Facebook Messenger. The danger was perceived to be mounting as the social network’s usage moved from desktop to smartphones, where chat apps had proven popular, the documents showed.
“Those companies are trying to build social networks and replace us,” Zuckerberg said of a trio of Chinese and Korean messaging apps that he had decided should be blocked from advertising on the social network in a January 2013 e-mail thread that included more than a dozen senior executives including Sheryl Sandberg, Facebook’s chief operating officer.
In the same thread, Javier Olivan, the company’s head of growth, said chat-app outfits were dangerous because they could “morph into Facebook,” then pointed to a recent announcement from WhatsApp that it had processed 18 billion messages in a day on Dec. 31, 2012.
The shift to mobile devices, combined with the rise of mobile-messaging services that could become social networks, is “the biggest competitive threat we face as a business,” Olivan wrote.
“WhatsApp launching a competing platform is definitely something I’m superparanoid about,” Mike Vernal, who was a senior Facebook executive, said in a separate internal e-mail thread in September 2013.
Facebook announced its purchase of WhatsApp in February 2014 and closed the roughly $22 billion deal in October. The acquisition, as well as the company’s 2012 purchase of photo-sharing app Instagram for $715 million, has been a focus for antitrust regulators who are looking into whether Facebook purchased technology startups to keep them from challenging its empire.
The Federal Trade Commission has reached out to the founders of WhatsApp, Jan Koum and Brian Acton, to schedule a meeting as part of its probe into Facebook’s competitive practices, source said. No meeting has taken place.
Facebook hasn’t challenged the veracity of the documents, but a spokesperson described them as “old documents” that “have been taken out of context by someone with an agenda against Facebook,” adding that they “have been distributed publicly with a total disregard for US law.”
The documents are among confidential court filings from a lawsuit brought by an app developer in California state court. Duncan Campbell, an Irish journalist responsible for distributing the material online, said on his Web site Wednesday that the court documents were sent to him anonymously in February of this year.
The Wall Street Journal wrote about some of the documents last year, and a subset of the nearly 7,000page cache was subsequently released by the UK parliament, which was considering more stringent regulation.
News Corp., owner of The Wall Street Journal and The Post, has a commercial agreement to supply news through Facebook.