Facebook is just the latest front in the EU’s war on Silicon Valley
The European Union is going after Silicon Valley yet again, this time alleging that Facebook gave false information to regulators during their review of the $22 billion acquisition of the messaging service WhatsApp in 2014.
“Companies are obliged to give the Commission accurate information during merger investigations. They must take this obligation seriously,” EU competition commissioner Margrethe Vestager said in a press release. “In this specific case, the Commission’s preliminary view is that Facebook gave us incorrect or misleading information during the investigation into its acquisition of WhatsApp.”
Vestager and the European Commission charge that Facebook told regulators that in the summer of 2014, before the EU gave the deal a green light, the company wouldn’t match Facebook user accounts with WhatsApp user accounts. Then, two years later, WhatsApp introduced to users “the possibility of linking WhatsApp user phone numbers with Facebook user identities.”
The allegations from Vestager and the Commission came in a “Statement of Objections,” which is just the first part of a formal investigation. Facebook has until the end of January to respond, and if the objections are “confirmed,” Facebook could be fined up to 1 percent of sales. Through September of 2016, Facebook has generated nearly $19 billion in revenue.
In its own statement, Facebook said the company is “confident that a full review of the facts will confirm Facebook has acted in good faith.”
The European Commission’s concerns about the WhatsApp deal are only the latest in a series of European regulatory actions against Silicon Valley. Just this week, the EU published its full $14 billion back-tax ruling against Apple, which for decades reduced its tax burden through a deal with the Irish government.
For Facebook in particular, 2016 hasn’t been a good year in European activities. Since last spring, German authorities have been investigating the company on antitrust grounds, with the support of Vestager and the European Commission.