Facebook faces massive fine for "misleading EU over $19bn WhatsApp deal"

21/12/2016

Facebook could be facing a fine of up to 1% of its global revenue for allegedly misleading European Union merger watchdogs when it won approval to buy the WhatsApp messaging service in 2014.

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The EU ’s antitrust authority said it suspects Facebook supplied "incorrect or misleading information" on linking data with WhatsApp as officials investigated the tie-up two years ago.

The move, which links WhatsApp information such as phone numbers to individual Facebook accounts, also generated an angry response from privacy activists and various domestic regulators.

However, the fine would not affect approval for the $22bn which has already gone ahead.
EU Competition Commissioner Margrethe Vestager is escalating the probe after officials quizzed Facebook over privacy policy changes announced in August that would allow the advertising platforms on Facebook and Instagram to draw upon data from WhatsApp.

Facebook informed the EU in 2014 it couldn’t combine WhatsApp data with its other services, but seemingly contradicted this in a move it made earlier this year.

“These are serious allegations,” said Agustin Reyna of the European consumer advocate group BEUC. “If Facebook provided misleading information about its ability to match Facebook and WhatsApp accounts it basically blocked the commission from checking the implications of data of this merger. This is unacceptable and sheds a bad light on the company’s readiness to respect consumers’ privacy."

The charge - which can ultimately lead to a fine of 1 per cent of Facebook's global turnover, or around $180m - adds to the backlash after the controversial decision it took this summer to share data between Facebook, WhatsApp and Instagram.

Margrethe Vestager, the European Union's Competition Commissioner, said Facebook had claimed it was technically impossible to automatically match accounts in 2014. She said the EU's "statement of objections" centred on its belief that this was not the case, and that Facebook did know how to combine accounts. According to Facebook, it has only gained this ability recently.

"Companies are obliged to give the Commission accurate information during merger investigations. They must take this obligation seriously," Vestager said.

"Our timely and effective review of mergers depends on the accuracy of the information provided by the companies involved. In this specific case, the Commission’s preliminary view is that Facebook gave us incorrect or misleading information during the investigation into its acquisition of WhatsApp. Facebook now has the opportunity to respond."

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