Facebook has been fined by European Union antitrust regulators for providing misleading information relating to its purchase of WhatsApp. The application is a messaging service that Facebook purchased in 2014.
In 2016, WhatsApp launched updates allowing user accounts on Facebook and WhatsApp to be automatically linked. This was contrary to information given to the antitrust regulators vetting the merger back in 2014. Apparently, Facebook claimed then that there was no reliable way to match Facebook and WhatsApp user IDs.
The European Commission believes that Facebook was aware that this was technologically possible in 2014 and had planned to activate the technology all along. It had therefore misled the regulators.
Consequently, Facebook was fined 1110 million euros ($122 million – £94.5 million.) for providing misleading information to EU officials during an investigation prior to the deal being approved. The European Commission described the fine as “proportionate and deterrent.”
The Commission acts as an overseer for such mergers, and its officials believe that Facebook staff was aware that the technology required for such ‘account matching’ was available back in 2014. They also believe that they were deliberately misled by Facebook . Hence the fine and its magnitude.
Facebook claimed that any inaccuracy of the information originally provided was not intentional, and that as far as the company is concerned the matter is ‘now closed.’ The issue does not affect the merger. The Commission confirmed that its decision to allow the merger was not affected by the filing errors two years ago. Original permission for the merger to proceed will not be affected. It was also stated that the fine was not related in any way to separate data protection investigations.
The maximum fine that the EU Commission could have given Facebook was 1% of its turnover. Taking the firm’s 2016 turnover figure, this would have amounted to $276 million. However, it was limited to $122 million due to the company cooperating with the Commission and its acknowledgement of the misleading information supplied.
The EU fine was preceded by a €150,000 fine issued by CNIL, France’s data protection watchdog. WhatsApp was fined €3 million on the same day by Italian antitrust authorities. It is alleged that the messaging service obligated users to share personal data with Facebook. There are appears to be a general data security with Facebook.
Margrethe Vastager, European competition commissioner, stated that “Today’s decision sends a clear signal to companies that they must comply with all aspects of EU merger rules, including the obligation to provide correct information. The Commission must be able to take decisions about mergers’ effects on competition in full knowledge of accurate facts.”
A Facebook spokesperson stated that the 2014 errors were not intentional, and that they had no effect on the ultimate decision to allow the merger. It was also stated that the company had cooperated with the European Commission on this matter, and do not intend to fight the fine.
Data matching between Facebook and WhatsApp can result in personal data between the two services. The type of data involved can include phone numbers and email addresses. This data can be used to facilitate ad targeting, where advertisers can target specific type of ads to users’ accounts based on their personal information.
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