The European Commission has fined Facebook $122 million for misleading regulators over its 2014 acquisition of WhatsApp. The announcement came on Thursday in a press release in which the Commission said that the social media company had provided "incorrect or misleading information" when it told regulators that it would be unable to link the profiles of users on WhatsApp and Facebook.
However, WhatsApp announced in 2016 that it would start sharing some user data, including phone numbers, with Facebook, contradicting the earlier claim. In its press release, the Commission said that Facebook knew the data crossover was technically feasible in 2014 when it bought WhatsApp for $22 billion, but that it had stated otherwise when asked by merger regulators.
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"When Facebook notified the acquisition of WhatsApp in 2014, it informed the Commission that it would be unable to establish reliable automated matching between Facebook users' accounts and WhatsApp users' accounts. It stated this both in the notification form and in a reply to a request of information from the Commission. 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.
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."
The ruling by the Commission will not have any impact on its decision to rubber stamp the acquisition, and remains separate from data protection investigations that are currently ongoing, the EC explained in the press release. The separate investigations involve historical data collection of WhatsApp users in Germany, the U.K., and Italy. Commissioner Margrethe Vestager, in charge of competition policy, said:
"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. And it imposes a proportionate and deterrent fine on Facebook. The Commission must be able to take decisions about mergers' effects on competition in full knowledge of accurate facts."
Facebook responded to the decision in a statement published on its website on Thursday. The company said it had "acted in good faith" during its communications with the EC, and claimed that it had attempted to provide "accurate information at every turn".
"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," the statement reads. "Today's announcement brings this matter to a close."
However, WhatsApp announced in 2016 that it would start sharing some user data, including phone numbers, with Facebook, contradicting the earlier claim. In its press release, the Commission said that Facebook knew the data crossover was technically feasible in 2014 when it bought WhatsApp for $22 billion, but that it had stated otherwise when asked by merger regulators.
https://cdn.*************/article-new/2016/08/WhatsApp_facebook.jpg
"When Facebook notified the acquisition of WhatsApp in 2014, it informed the Commission that it would be unable to establish reliable automated matching between Facebook users' accounts and WhatsApp users' accounts. It stated this both in the notification form and in a reply to a request of information from the Commission. 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.
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."
The ruling by the Commission will not have any impact on its decision to rubber stamp the acquisition, and remains separate from data protection investigations that are currently ongoing, the EC explained in the press release. The separate investigations involve historical data collection of WhatsApp users in Germany, the U.K., and Italy. Commissioner Margrethe Vestager, in charge of competition policy, said:
"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. And it imposes a proportionate and deterrent fine on Facebook. The Commission must be able to take decisions about mergers' effects on competition in full knowledge of accurate facts."
Facebook responded to the decision in a statement published on its website on Thursday. The company said it had "acted in good faith" during its communications with the EC, and claimed that it had attempted to provide "accurate information at every turn".
"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," the statement reads. "Today's announcement brings this matter to a close."