Facebook May Pay A Hefty Fine For Allegedly Breaching EU's Merger-Procedure Rules

By Precious Gem de Peralta
WhatsApp logo
EU is accusing Facebook of giving incorrect and misleading information when it was investigating the tech's company's planned acquisition of WhatsApp back in 2014. Bhupinder Nayyar via Flickr

Facebook is currently on the European Union’s bad side. The European Commission just accused the tech company of breaching EU’s merger procedure rules. Apparently, Facebook might have given “incorrect or misleading information” when its planned acquisition of WhatsApp was being investigated back in 2014. If found out to be true, the company has to pay up to one percent of its worldwide revenue.

The Wall Street Journal reported that the commission suspects the tech giant of inaccurately claiming it was unable to reliably match user accounts between the social media platform and WhatsApp. This became even more evident when the two platforms indeed began sharing use data two years later. In fact, the commission cited this in its press release.

The free messaging app had announced back in August 2016 that there is a “possibility of linking WhatsApp user phone numbers with Facebook user identities”. The said improvement of its service includes giving permission for Facebook to “offer better friend suggestions or displaying more relevant ads on WhatsApp users’ Facebook accounts”.

Facebook is given until the end of January to respond. The company will be facing a fine up to one percent of its worldwide revenue if it indeed breached EU’s rules. According to The Wall Street Journal, it might amount to around $179 million based on the Facebook’s 2015 revenue.

The commission also mentioned that it has already sent a Statement of Objections to Facebook. Commissioner Margethe Vestager said, “Companies are obliged to give the Commission accurate information during merger investigation. They must take this obligation seriously. Our timely and effective review of mergers depends on the accuracy of the information provided by the companies involved.”

This is not the first time that Facebook has ran afoul of EU. The social media platform along with Twitter, Google, and Microsoft was already warned earlier this month for failing to address hate speech. EU’s Commissioner for Justice Vĕra Jourová told the Financial Times that the social networking sites should “make a strong effort in the coming months”. Otherwise, EU will have to enact a law that will require them to do so.

As for WhatsApp, EU privacy regulators sent a letter back in October. Apparently, the company was warned about possibly violating data-protection rules when it made a change to its privacy policy. The letter contained a request for WhatsApp to stop sharing users’ personal data with Facebook. Yahoo also received a letter from EU concerning the 500 million Yahoo accounts that were hacked.

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