Facebook fined $122m by the EU for “misleading” information over WhatsApp takeover
The European Commission issued Facebook with a massive fine Thursday, after the company provided misleading information during an investigation into the $19 billion acquisition of popular messaging service WhatsApp.
The 110 million euro ($122 million) fine is one of the biggest ever imposed on the social network and highlights Europe’s ongoing battles with some of the largest U.S. tech giants. Earlier this week, French and Dutch regulators also fined Facebook for infringing data protection and privacy rules.
“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,” Margrethe Vestager, the EU’s competition chief, said in a statement. “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.”
Louisa Penny, senior counsel with law firm Taylor Wessing, told VICE News that the fine is “a warning to companies to ensure that the data provided to regulators is both accurate and complete.”
— Margrethe Vestager (@vestager) May 18, 2017
The issue arose at the time of the merger in 2014, when Facebook stated that it was technically impossible to combine user information from Facebook and WhatsApp automatically. However, last August the messaging service announced that it would start sharing some user data with its parent company, and that personal information like phone numbers and device IDs would be used to improve targeted advertising on Facebook.
WhatsApp suspended sharing information with Facebook in Europe in November, but a month later Vestager announced the opening of an investigation into the activity.
The Commission said it found that Facebook staff were already aware in 2014 of “the technical possibility of automatically matching Facebook and WhatsApp users’ identities.” The imposition of the fine will not reverse the Commission’s earlier decision to clear the merger of WhatsApp and Facebook.
Facebook has responded to the imposition of the fine by saying that “the errors we made in our 2014 filings were not intentional.” In a statement to VICE News, a spokesperson said: “The commission has confirmed that they did not impact the outcome of the merger review. Today’s announcement brings this matter to a close.”
While the fine is significant when compared to the penalties handed out by the Dutch and French authorities, it is a drop in the ocean when compared with Facebook’s global revenues. The company’s most recent financial report revealed that it earned over $8 billion in revenue in the first three months of 2017.
The maximum fine allowable under EU rules is 1 percent of Facebook’s 2016 turnover, which would amount to $276 million.
In recent years Europe — and Vestager in particular — has been focused on limiting the power technology companies hold. The EU is currently investigating Google over its online shopping practices as well as looking into its Android smartphone operating system. Apple has also faced scrutiny, with the Commission ordering the company to repay $14.5 billion in unpaid taxes to Ireland last year — even though the Irish government said it did not want the money.
“Going forward, the direction of travel is clear that the conduct of big tech companies regarding data sharing and data exploitation will continue to face greater scrutiny,” Penny told VICE News.
Cover: Associated Press