Facebook fined €110m after ‘misleading’ European officials over WhatsApp takeover
YASUYOSHI CHIBA/AFP/Getty Images
Margrethe Vestager is holding the biggest technology companies in Europe to account. Her latest move is to fine Facebook over its takeover of WhatsApp in 2014.
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The European Commissioner has fined Mark Zuckerberg’s social network €110 million (£94m) after finding it gave “incorrect or misleading information” about its plans for the messaging service and how it would share its user data.
“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,” Vestager said in a statement.
For Facebook, the fine is one of the largest it has encountered in Europe. It follows two recent financial penalties placed on Facebook by French and Dutch authorities.
The new fine is centered on how Facebook has developed its WhatsApp messenger services and focuses on information it provided to Vestager’s staff at the time of its $19 billion purchase. However, it does not impact the merger of the two companies.
When Facebook acquired WhatsApp three years ago, it told the Commission it wasn’t technically possible for it to create an automated system for matching users between the two services. In August 2016, WhatsApp announced it would start sharing telephone and user data with parent company Facebook. The decision proved controversial with data protection officials around the world investigating whether customer data has been misused.
As well as privacy investigations, the 2016 deal prompted Vestager, who is head of competition regulations in the EU, to issue a statement of objections. The preliminary findings from the Commission said it believed Facebook knew it would be possible to merge user data between itself and WhatsApp. These were confirmed with the fine today.
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“The technical possibility of automatically matching Facebook and WhatsApp users’ identities already existed in 2014, and Facebook staff were aware of such a possibility,” the Commission’s statement said.
“Facebook committed two separate infringements by providing incorrect and misleading information in the merger notification form and in the reply to a Commission request for information”.
A spokesperson for Facebook said it has “acted in good faith” with the European Commission and it has tried to give it the correct information. “The errors we made in our 2014 filings were not intentional and the Commission has confirmed that they did not impact the outcome of the merger review,” the spokesperson said.
Although the fine is one of the largest the company has received in Europe, it still marks a tiny amount of the company’s income. Vestager’s competition commission had the power to fine Facebook up to one per cent of aggregated turnover. During the first three months of 2017, Facebook’s revenue was $8bn (£6.1bn).
The company could also potentially face further action from European regulators about the WhatsApp takeover. In the UK, the Information Commissioner, who oversees data protection laws, has launched an investigation into how WhatsApp shared phone numbers with Facebook. As a result, Facebook paused the data sharing while the ongoing investigation takes place.
In the rest of Europe, Facebook is facing similar investigations with its data sharing also being paused after complaints from European regulators.