Facebook Fined $122 Million for Misleading EU Regulators Over WhatsApp Deal

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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.

“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.”