March 17, 2018

European Union fines Facebook over misleading information

19 May 2017, 11:30 | Rodolfo Wallace

Getty Images

Getty Images

Facebook purchased WhatsApp for US$22 billion in 2014.

The European Commission today imposed a fine of € 110m on Facebook social media network because the USA company provided inaccurate information during the research on the acquisition of the WhatsApp mobile application, according to Reuters and AFP.

The EC said it found out that contrary to statement made by Facebook in 2014 the technical possibility of matching automatically users' identities between Facebook and WhatsApp existed back in 2014 and the staff at Facebook had been aware of that possibility.

While the incorrect or misleading information submitted by Facebook did not have a bearing on the outcome of the approval decision, the Commission found that Facebook's conduct was a serious breach of its procedural obligations under the European Union merger control rules. It was deemed a proportionate and deterrent fine as the watchdog claimed Facebook had stated that it was not able to automatically match user accounts on the namesake platform and WhatsApp but a few years later it launched a service which did exactly the same thing. It was calculated taking into account the fact that there were two counts of misleading information being provided and that the information was knowingly misleading, but also recognizes Facebook's cooperation with the investigation.

The Commission has the power to impose fines of up to 1% of the infringing party's turnover and in this case the fine of €110 million represents around 0.44% of Facebook's 2016 revenues. "The mistake we made in the documents we gave in 2014 was not appropriate and the Commission confirmed that this had no effect on the outcome of the merger examination", said Facebook spokesman Alend Williams at the French Agency.

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"It's just the beginning".

"The more data you aggregate and the more detailed profile you can make on people, the more power you actually have".

"Normally, we don't know how our data is used". "This decision shows it is actually a problem". Facebook announced it would start to share WhatsApp data with the rest of the firm. Commission spokesman Ricardo Cardoso said the fine was less than it could have been because Facebook cooperated.

In this context, the fine on Facebook reiterates that the Commission is keeping a very close eye on whether companies are complying with the procedural rules, and serves as a stern reminder for merging parties (and indeed intervening third parties) of the need to provide accurate and reliable information to the Commission.

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