Facebook fined €110mln for misleading European regulations over Whatsapp takeover

Facebook Inc (NASDAQ:FB) has been fined €110mln by European regulators for providing misleading information during a review of its takeover of the Whatsapp messaging service app in 2014.

The European Commission said Facebook had wrongly claimed that it would not be able to automatically link user accounts with Whatsapp when the deal was being vetted. Two years later the social media giant launched a service that did exactly that, sparking a privacy backlash.

“The Commission has found that, contrary to Facebook’s statements in the 2014 merger review process, the technical possibility of automatically matching Facebook and WhatsApp users’ identities already existed in 2014, and that Facebook staff were aware of such a possibility,” the Commission said.

Facebook insisted that the errors it made in 2014 were not intentional and that the Commission had confirmed that it did not impact the outcome of the merger review. The fine will not reverse the Commission’s decision to clear the purchase of WhatsApp.

“We’ve acted in good faith since our very first interactions with the Commission and we’ve sought to provide accurate information at every turn,” Facebook said in a statement.

Last year a Whatsapp update used information such as phone numbers and phone models to establish links between profiles, allowing it to target adverts and improve Facebook friend suggestions.  

The update was criticised by some WhatsApp users, who claimed it was an invasion of privacy and that Facebook had broken its promises. In response, Facebook rolled back some of the changes in the UK and Europe. However, the changes prompted an investigation by the EU.

“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,” the Commission said.

The Commission has been taking a tough stance on US technology companies. It is investigating Alphabet’s Google over allegedly breaking competition laws in relation to its Android mobile operating system.

Apple was also forced to pay €13bn back to Ireland after Commission found the country offered the iPhone make illegal tax benefits

Story by ProactiveInvestors