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EU says Facebook misled it over its WhatsApp data-sharing policy

EU says Facebook misled it over its WhatsApp data-sharing policy


The social network faces a fine of up to $179 million

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Fackbook Acquires WhatsApp For $16 Billion
Photo illustration by Justin Sullivan/Getty Images

The European Commission has accused Facebook of providing “incorrect or misleading information” in the run-up to its $19 billion acquisition of WhatsApp in 2014. Information requested by the Commission is used to vet large mergers and takeovers, aiming to find out if the resulting business would be anti-competitive. If Facebook cannot provide a decent excuse for misleading the Commission before January 31st it could be fined up to $179 million.

The Commission’s complaint refers specifically to the nature of the data-sharing agreement between Facebook and WhatsApp. In 2014, Facebook told the Commission that it would be unable to automatically link data between accounts on the two services, but in August this year, the social network introduced a new privacy policy that does exactly that. WhatsApp user data — including phone numbers — is shared with Facebook in order to map social connections and deliver more relevant ads on both services.

Facebook could be fined — but the acquisition won’t be overturned

The Commission does not believe that sharing this data is anti-competitive, as there are plenty of other companies offering similar services. But, that doesn’t excuse providing inaccurate data. “Companies are obliged to give the Commission accurate information during merger investigations,” said commissioner Margrethe Vestager in a press statement. “In this specific case, the Commission's preliminary view is that Facebook gave us incorrect or misleading information during the investigation into its acquisition of WhatsApp.”

Facebook now has until January 31st to respond to the Commission’s charges. If it can’t provide adequate reasoning for its actions, it faces a fine of up to 1 percent of its global annual Facebook's turnover. Based on the company’s 2015 revenue, that could mean as much as $179 million.

In a statement, Facebook said: “We’ve consistently provided accurate information about our technical capabilities and plans, including in submissions about the WhatsApp acquisition and in voluntary briefings before WhatsApp’s privacy policy update this year. We’re pleased that the commission stands by its clearance decision, and we will continue to co-operate and share information officials need to resolve their questions.”

Update December 20th, 7:37AM ET: Updated with Facebook’s statement.