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Facebook fined a hefty $122Mn for serving ‘misleading information’ about WhatsApp acquisition

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The ongoing tussle between Facebook and the European Union (EU) seems far from over. The latter has now levied a heavy fine on the social media giant for violating the terms of its 2014 acquisition of wildly popular messaging giant — WhatsApp. The EU claims that Facebook provided them with misleading information about the transaction and are, thus being fined a hefty 110 million euros ($122 million).

Speaking about the EU’s verdict, 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. 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.

This humongous fine comes fresh off the heels of the minor $166,000 fine levied on the social media giant for flouting French data protection laws. It has been announced by the European Commission, the EU’s competition watchdog, who believes that the social media giant has been completely forthcoming about its intentions during the review process of WhatsApp’s $19 billion acquisition.

The Commission, in its official press statement, claims that Facebook has informed the EU that it will not be able to generate links between a user’s profile on the social platform and WhatsApp. And that was surely the case when the acquisition happened back in 2014. The messaging giant was itself too concerned about the privacy of its massive user base.

But, Facebook helped soften the said view in order to help WhatsApp expand beyond the existing consumer-focused front. In 2016, the messaging giant announced that it would start sharing its user data (including the phone numbers) with its parent company to simplify the user experience. While we’ve only seen Facebook suggestions till date, the primary aim of this tool is to build WhatsApp Business — an upcoming offering that’ll debut in India later this year.

This change in WhatsApp’s privacy policies didn’t sit well with the EU and it has described its grievance as under:

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.

And as we all know, Facebook isn’t exactly at fault in this situation. Technology giants are known to its change tactics and practices over time. Last year, the social media giant decided it was time to monetize WhatsApp and the only way they could do the same was through user data and business profiles. Speaking on the same, Facebook in a statement said:

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. Today’s announcement brings this matter to a close.

Further, the blog post mentions that today’s decision will have zero impact on the Commission’s decision to accept the merger deal. It says that the decision wasn’t solely based on the possibility of user data sharing clause but also several other major factors. Thus, it has decided to impose fines of up to 1 percent of the aggregated turnover of the social media, calling the 110 million euros fine as ‘both proportionate and deterrent’.

This is not the first time Facebook or its subsidiary WhatsApp is being snubbed over its practices in the European Union. Earlier, both Germany and U.K have ordered the social media giant to stop data collection of WhatsApp users from their countries. It has recently also been fined a huge €3 million (or $3.34 milion) by Italian antitrust authorities for its data sharing practices yet again.

Facebook has been repeatedly facing investigations into its operations by the EU. We’ve contacted Facebook for more info and will update you once we hear back from them.

A hands-on guy fascinated by new apps, technologies and enterprise products.

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