Facebook fined €110m for providing misleading information about WhatsApp purchase

Posted May 19, 2017

The European Commission has fined Facebook €110 million ($122 million USD) for "providing misleading information" during its $19 billion acquisition of WhatsApp in 2014. However, that all changed in 2016 when WhatsApp updated its privacy policy and started linking users' phone numbers with Facebook users' identities.

Facebook has been fined Euro 110 million ($120 million or roughly Rs. 773 crores) for providing inaccurate and misleading information in its WhatsApp acquisition by the European Commission.

Competition commissioner Margrethe Vestager said the sanction was "proportionate" and would send a clear message that companies must comply with European Union merger rules.

Vestager described the fine as a "proportionate and deterrent" warning that merger decision must be made "in full knowledge of accurate facts".

Facebook purchased WhatsApp, which now has more than 1 billion users in over 180 countries, for $22 billion in 2014.

But the commission found out that wasn't true and said that Facebook's staff knew about the possibility but failed to inform them.

On 20 December 2016, the Commission addressed a Statement of Objections to Facebook detailing its concerns.

The Commission specifically took issue with Facebook's claim that it would not be able to reliably, automatically link users' accounts between Facebook and WhatsApp.

Facebook said in a statement that it cooperated with the Commission's investigation and that the incorrect statements were not intentional.

Sadly for Facebook, the misleading action falls under the EU Merger Regulation that companies are required to provide correct information.

There were two separate offences - one when Facebook first notified the European Commission that it wanted to buy WhatsApp and a second when it responded to an EC request for further information. "Today's announcement brings this matter to a close", it added.

Previous year a Whatsapp update used information such as phone numbers and phone models to establish links between profiles, allowing it to target adverts and improve Facebook friend suggestions.