Brussels hits Facebook with €110m fine over WhatsApp takeover

Margrethe Vestager
European Commissioner for Competition Margrethe Vestager

Social network told to pay up for misleading Commission over user profiles

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18 May 2017 | 0

The European Commission has fined Facebook €110 million for providing incorrect or misleading information during the Commission’s 2014 investigation under the EU Merger Regulation of Facebook’s acquisition of WhatsApp.

According to the Merger Regulation, the Commission can impose fines of up to 1% of the aggregated turnover of companies who intentionally or negligently provide incorrect or misleading information to the Commission.

Commissioner in charge of competition policy Margrethe Vestager (pictured), said: “[This] 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.”

The EU Merger Regulation obliges companies in a merger investigation to provide correct information that is not misleading as this is essential for the Commission to review mergers and takeovers in a timely and effective manner. This obligation applies, regardless of whether the information has an impact on the ultimate outcome of the merger assessment.

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 and WhatsApp user 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.

On 20 December 2016, the Commission addressed a Statement of Objections to Facebook detailing its concerns.

The Commission found that, contrary to Facebook’s statements in the merger review process, it was possible to automatically match Facebook and WhatsApp user, and that Facebook staff were aware of it.

The decision ultimately had no impact on the Commission’s decision to authorise the transaction under the EU Merger Regulation and is unrelated to ongoing national antitrust procedures or privacy, data protection or consumer protection issues, in the wake of changes made to WhatsApp’s privacy policy last year.

This is the first time that the Commission has adopted a decision imposing fines on a company for provision of incorrect or misleading information since the entry into force of the 2004 Merger Regulation. Past Commission decisions in this regard were adopted under the 1989 Merger Regulation in accordance with different fine-setting rules.

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