The Austrian Federal Competition Authority and the Austrian
Regulatory Authority for Broadcasting and Telecommunications have
been working together on the development of a monitoring system for
digital platforms since November 2019. They have
now published a report on instant messaging
applications and their relevance for competition in Austria.
- Many Austrian customers engage in multi-homing, having installed several messaging apps.
- WhatsApp, acquired by Facebook some time ago, is the market leader in messaging apps, followed by Facebook Messenger, while Snapchat, Skype, iMessage and Telegram are not used widely (any longer) in Austria. WhatsApp is considered a must-have for many users, and has the greatest market power.
- There is currently no indication that WhatsApp is exploiting its market power in relation to other market participants.
- Transfer of market power to other markets possible: WhatsApp's extensive coverage and widespread usage can lead to market power being shifted, for instance when various services are bundled together to establish a new service more quickly. One such example is new apps for payment systems on smartphones.
As a side note, Facebook's acquisition of WhatsApp would not have required merger control clearance in Austria at that time as WhatsApp did not generate turnover so that turnover based jurisdictional thresholds would not have been met. This has meanwhile been remedied by introducing transaction value based thresholds in Austria (and Germany). In future transactions in the digital services sector, the Austrian competition authority has made clear, also by means of the report, that a focus of the review will be on the strategic rationale of acquisitions to avoid a situation where a transaction impedes innovation and consumer choice.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.