By Jeffrey May, J.D.
The European Commission (EC) has fined Facebook, Inc. for providing incorrect or misleading information to the EC during an investigation into the company’s 2014 acquisition of WhatsApp. Today, the EC announced that a €110 million fine was necessary because Facebook had provided misinformation about the company's inability to establish reliable automated matching between Facebook users' accounts and WhatsApp users' accounts during the investigation. According to the EC, 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.
"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," said EC Competition Commissioner Margrethe Vestager. "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 EC announced its investigation into whether the parties provided accurate and complete information during the merger investigation in December 2016. The EC sent a statement of objections, noting its concern that Facebook intentionally, or negligently, submitted incorrect or misleading information to the EC, in breach of its obligations under the European Union merger regulation. The investigation followed an August 2016 WhatsApp announcement regarding the possibility of linking WhatsApp user phone numbers with Facebook user identities. According to the EC, WhatsApp explained that this was done with a view to improving the service by, for example, allowing Facebook to offer better friend suggestions or displaying more relevant ads on WhatsApp users' Facebook accounts.
The decision today has no impact on the EC’s October 2014 decision to approve Facebook’s acquisition of WhatsApp because that decision was based on a variety of factors going beyond the possibility of matching user accounts, it was noted.
Companies: Facebook, Inc.; WhatsApp Inc.
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