Facebook slammed with heavy fine for misleading the EU Commission over WhatsApp

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EU and Facebook

Credit: http://marketingland.com/google-facebook-face-large-fines-europe-unless-change-policies-209572

The EU Commission has slammed a hefty fine of €110 million [$122 million] on Facebook for providing “misleading information about WhatsApp” acquisition. The EU made this announcement known today in a press release following conclusion of its investigations on the matter.

Speaking today on the fine, 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.”

The EU’s action was based on Facebook’s failure to provide what it described as “correct information to the Commission. Information provided, according to Vestager, was not only inadequate, but misleading. It is incumbent on companies to provide the Commission with the right information under the EU Merger Regulation.

In notifying the Commission of its acquisition of WhatsApp in 2014, Facebook said it would be “unable to establish reliable automated matching between Facebook users’ accounts and WhatsApp users’ accounts.” The social media company did not however, keep to its words as it later in 2016 announced changes in the terms of service and privacy policy of WhatsApp. One of the highly controversial areas of the policy it amended in August 2016 was the possibility of linking WhatsApp users’ phone numbers with Facebook users’ identities.

Facebook was given until January 2017 to respond to the accusation that it violated its procedural rules for the approval of mergers. In its official reaction, Facebook denied any wrongdoing in its dealings with the European Union per the information it provided at the time. The company in a statement said:

We’ve consistently provided accurate information about our technical capabilities and plans,” a Facebook spokesman said. “We respect the commission’s process and are confident that a full review of the facts will confirm Facebook has acted in good faith.”

Facebook paid $12 billion of its stock value, and another $4 billion, while founders of the app got granted $3 billion Facebook stock. The deal which was initially kicked against by some European telecoms companies eventually got the greenlight of the European Commission, declaring that both companies were not “close competitors.” The Commission also gave its approval based on the fact that consumers will still be left with a choice of applications to choose from.

Last September, Facebook was issued with an administrative order by Germany to stop collecting data on WhatsApp users. Germany’s privacy watchdog argued that sharing WhatsApp user data with Facebook constitutes “an infringement of national data protection law.”

The 1 percent fine could be based on Facebook’s 2015 turnover, which could amount to $179 million. Until Facebook responds to this accusation on or before January 31, I guess we may just have to wait to see what comes up next.

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Author: Ola Ric

Ola Ric is a professional tech writer. He has written and provided tons of published articles for professionals and private individuals. He is also a social commentator and analyst, with relevant experience in the use of social media services.

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