Facebook Fined €110 Million For Providing Misleading Information On WhatsApp Acquisition
Facebook has been fined €110 million (£94 million) by the European Commission for “providing incorrect or misleading information during the Commission’s 2014 investigation under the EU Merger Regulation of Facebook’s acquisition of WhatsApp.”
The social network’s takeover of the messaging service took place in 2014, with Facebook acquiring the company in a landmark $19 billion deal. However, the European Union has stated that during this deal, Facebook reported to them that it was unable to automatically match user accounts on its own platform and on WhatsApp. In 2016 it proved that this wasn’t the case, when it launched a service that allowed account matching between the two platforms. “By coordinating more with Facebook, we’ll be able to do things like track basic metrics about how often people use our services and better fight spam on WhatsApp,” Facebook said at the time. “And by connecting your phone number with Facebook’s systems, Facebook can offer better friend suggestions and show you more relevant ads if you have an account with them.”
While the European Commission noted that the decision to fine Facebook “has no impact on the Commission’s October 2014 decision to authorise the transaction under the EU Merger Regulation,” the EU is still going ahead with the fine as a result of Facebook providing them with incorrect information. The Merger Regulation allows the EU to fine companies for up to 1 per cent of their aggregated turnover, with the fine taking into account the nature, the gravity and duration of the infringement.
The Commission released a statement outlining the reasoning behind the fine. “The Commission has found that, contrary to Facebook’s statements in the 2014 merger review process, the technical possibility of automatically matching Facebook and WhatsApp users’ identities already existed in 2014,” the Commission said, adding that “Facebook staff were aware of such a possibility.”
“Facebook committed two separate infringements by providing incorrect and misleading information in the merger notification form and in the reply to a Commission request for information”, the statement reads. “The Commission considers that these infringements are serious because they prevented it from having all relevant information for the assessment of the transaction.” The Commission added: “Facebook staff were aware of the user matching possibility and that Facebook was aware of the relevance of user matching for the Commission’s assessment”
This is the first time that the European Commission has imposed a fine on a company for providing incorrect information since the 2004 Merger Regulation was enforced. Facebook has contested that they unintentionally provided the EU with the incorrect information, but have agreed to the fine. “We’ve acted in good faith since our very first interactions with the Commission and we’ve sought to provide accurate information at every turn,” a statement from the social network reads.
“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.”
The EU has pursued a number of US technology companies over the last few years, with the Commission launching an investigation into Google over alleged antitrust practices including using its dominance to benefit its own AdSense advertising business, and forcing Apple to pay back €13 billion to Ireland after it was ruled that the country offered the company “illegal tax benefits.” European countries Italy and France have also hit Facebook with separate fines as a result of the WhatsApp deal, with Italian anti-trust regulators fining the social network €3 million for forcing users to agree to share their personal data with Facebook, while France regulators fined the company €150,000 for breaking rules on user tracking and data sharing.