Facebook fined $94m for providing misleading information on WhatsApp merger

Posted May 20, 2017

Facebook Accused of Misleading EU in WhatsApp Takeover ProbeThe European Commission on Thursday fined USA social media giant Facebook 110 million euros ($120 million) for providing incorrect and misleading information on its takeover of WhatsApp, imposing its biggest penalty for such a breach. In December 2016, that Commission announced that it had sent Facebook a Statement of Objections alleging that Facebook had intentionally, or negligently, submitted incorrect or misleading information to the Commission during its review of the Transaction by stating that it was unable to establish reliable automated matching between its users' accounts and WhatsApp users' accounts.

In its defense, Facebook said that it had acted in compliance with common decency in its agreement with Europe's antitrust authorities, and that it would not request the monetary punishment.

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, and that Facebook staff were aware of such a possibility.

Before its merger with Facebook, WhatsApp was famous for its stringent privacy policies, including a promise to never share users' personally identifiable information for ad purposes.

"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", EU Competition Commissioner Margrethe Vestager said in a statement after imposing the Commission's biggest penalty for such a breach.

She described the fine - for hiding the company's hypothetical ability to match up users' activity on Facebook.com with their behavior elsewhere on line - as "proportionate".

According to European Union merger regulation, the EC can impose a fine totalling 1 per cent of a company's aggregated turnover if it has provided misleading or incorrect information.

The moral of the lesson is: do not mislead the European Union when it comes to business deals (or anything actually) or else you'll be paying them €100 million eventually.

Commission rules suggest the social network could have been fined up to 1% of its turnover - a figure that would have been at least twice the amount it has been told to pay.

The commission also informed that the Facebook-WhatsApp merger will be unaffected by this announcement.

The Facebook/WhatsApp merger case In August 2014, Facebook, which is active in social networking, consumer communications and online non-search advertising services, notified the Commission of its plans to acquire the consumer communications services provider WhatsApp.