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AFCA/RTR Cooperation: Publication of the report on Instant Messaging

The Austrian Federal Competition Authority (AFCA) and the Austrian Regulatory Authority for Broadcasting and Telecommunications (RTR) have been working together on the development of a monitoring system for digital platforms since November 2019.

Monitoring communication services with a focus on instant messaging

The Austrian Federal Competition Authority (AFCA) and the Austrian Regulatory Authority for Broadcasting and Telecommunications (RTR) have been working together on the development of a monitoring system for digital platforms since November 2019.

The objective of competition monitoring is to capture all digital communication platforms and platforms that have a large impact on the use of the internet, and to assess those from a competition perspective. These platforms include voice and messaging apps, voice assistants, operating systems and app stores or browsers.

Publication of RTR report on instant messaging

Following publication of a method paper in May 2020, the RTR has now published a report on “Interpersonal communications services with a focus on instant messaging”, prepared with AFCA’s involvement.

Instant messaging refers to communication channels used by two or more participants to exchange messages (e.g. WhatsApp, Facebook Messenger, Telegram, Skype, iMessage etc.).

Results of the assessment

It comes as no surprise that WhatsApp is the market leader in messaging apps. Facebook Messenger is also near the top, while Snapchat, Skype, iMessage and Telegram are only used to a small extent in Austria.

Many customers have several of these apps installed on their smartphones and use them in parallel. This is referred to as multihoming, and promotes competition and innovation.

Further results

  • WhatsApp is considered a must-have for many users, and has the greatest market power.

Due to its widespread use and coverage, most group chats take place on this messaging service. There is currently no indication that WhatsApp is exploiting its market power in relation to other market participants.

  • Instant messaging is part of an ecosystem and used to collect data

Ecosystems such as Facebook analyse the duration and frequency of the use of their services as well as users’ behaviour to provide the personalised advertising that their customers demand.

  • Less competition pressure for Facebook after WhatsApp takeover

Instant messaging is a service provided for strategic reasons. In Austria, the decline in time spent on Facebook has coincided with an increase in time spent using WhatsApp. Experience from other countries has shown that leading instant messaging services such as LINE, WeChat or Kakaotalk in Asia have developed into platforms with a large number of functions far more quickly than was the case with WhatsApp. The strategic reasons should be considered to a greater extent within the scope of the economic theory of harm.

  • 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.

  • Genuine customer choice in question

End users must be able to voluntarily consent to the data processing conditions. However, WhatsApp’s market power places a question mark over whether end users really have a choice.

  • Instant messaging creates advantages for consumers

The demand for communication services has surged in recent years. Such services play an important role in today’s social interactions, and consumers incur no direct costs when they use them.

“The RTR report underlines the importance of focusing on the strategic reasons behind the acquisition of a competitor in the digital services sector to avoid a situation in which competition pressure is minimised for large and dominant companies.The consequences could be less innovation and less choice for consumers.This would not be in keeping with merger control,” explains Director General Theodor Thanner.