European Commission fines Facebook €110 million for providing “misleading” information in $20Bn Whatsapp acquisition

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The European Commission (EC) fined Facebook €110 million for providing “incorrect or misleading” information in 2014 regarding its $20 billion acquisition of WhatsApp.
When Facebook notified the EC about the acquisition in 2014, it said it would be unable to establish reliable automated matches between the two companies’ user accounts.
However, in August 2016, WhatsApp announced updates to its privacy policy which showed it may link user phone numbers with Facebook identities.

After an investigation, the EC found the technical capability to do so existed in 2014, and Facebook staff were aware of this.

Competition Commissioner Margrethe Vestager said the fine: “sends a clear signal to companies that they must comply with all aspects of EU merger rules, including the obligation to provide correct information.”

“It imposes a proportionate and deterrent fine on Facebook. The commission must be able to take decisions about mergers’ effects on competition in full knowledge of accurate facts,” she added.

The commission could have fined Facebook up to 1 per cent of its turnover, which would have been around $276 million, but said it took into account Facebook’s cooperation during the investigation.

Also, the EC’s decision to levy the penalty does not have any impact on its decision to authorise the transaction, which the commission said was based on a number of elements going beyond the issue at hand.

A Facebook company representative said: “the errors we made in our 2014 filings were not intentional and the commission has confirmed that they did not impact the outcome of the merger review. Today’s announcement brings this matter to a close.”

This is the first time the EC fined a company for the provision of incorrect or misleading information since the 2004 Merger Regulation came into force.

The EC also clarified the decision is unrelated to ongoing national antitrust procedures or privacy, data protection or consumer protection issues, which may arise following the August 2016 update of WhatsApp’s privacy policy.

WhatsApp has been in hot water with regulators ever since it implemented the update.

The company was recently fined €3 million in Italy for obliging users to agree to share their personal data with Facebook.

In November 2016, the app maker stopped sharing data of European users with Facebook a week after initiating a similar move in the UK at the request of the country’s Information Commission.

The Republic of Ireland’s Data Protection Commissioner in April said she hopes to come to an agreement with Facebook in a matter of months covering WhatsApp sharing data with the social media giant.

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