European Union fines Facebook over misleading WhatsApp data compatibility

May 18, 2017 10:30 pm

An illustration picture shows the log-on screen for the website on an Ipad, in Bordeaux, Southwestern France on January 30, 2013. (Photo by Reuters)

The ’s competition regulator has imposed a massive fine of 110 million euros ($122 million) on network Facebook over misleading information on the purchase of messaging service WhatsApp and the ensuing merger process.
The European Commission said Thursday that Facebook misled the monitoring body in 2014 by pretending that it had not been able to “establish reliable automated matching” between user accounts of Facebook and WhatsApp after it bought the popular online messenger.
The commission said the information was incorrect as WhatsApp in 2014 offered updates, which showed that linking user phone numbers with Facebook user IDs was possible.
“However, in August 2016, WhatsApp announced updates to its terms of service and privacy policy, including the possibility of linking WhatsApp users’ phone numbers with Facebook users’ identities,” said the commission.
Competition Commissioner Margrethe Vestager said Facebook had affected the competition by cheating on the merger and that the fine could serve as a deterrent.
“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,” Vestager said in a statement, adding that “the Commission must be able to take decisions about mergers’ effects on competition in full knowledge of accurate facts.”

EU Competition Commissioner Margrethe Vestager addresses a press conference at European Commission in Brussels on April 5, 2017. (Photo by AFP)

The fine is the biggest penalty for merger breach ever imposed by the EU, which had cleared the USD 19 billion acquisition of WhatsApp in late 2014. The commission said the new ruling and the fine would have no impact on its October 2014 clearance of the deal. Other officials said cooperation by Facebook reduced the amount of the fine.
Facebook issued a statement, saying that it was a mistake not to inform the EU about the technical issues of the merger. The company said it was happy that the case reached an end with the imposition of the fine.
“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,” Facebook said.
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