European Commission Fines Facebook A Huge Amount of Money for Misleading Information.

Jackey Motwani
Jackey Motwani
May 21, 2017
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European Commission Fines Facebook A Huge Amount of Money for Misleading Information. 2014 - 2017

The European Commission has fined social media platform Facebook $122 million (€110 million) for providing misleading information during the Commission 2014 investigation of the company's WhatsApp acquisition and not complying with European Union merger rules and regulation.

The EU Merger Rules says that companies in a merger investigation to give correct information that is not misleading or incorrect in any way as this is important for the Commission to check mergers and takeovers in a timely and proper way. This obligation stands, regardless of whether the information has an impact on the last merger assessment results.

According to report, when Facebook acquired WhatsApp in 2014, it notified the Commission that it would be unable to set up reliable automated matching between Facebook users’ accounts and WhatsApp users’ identities. It stated this in the notification form also in a reply to a request of information from the Commission. However, in August last year, WhatsApp announced updates to its terms of service and privacy policy, which includes the linking WhatsApp users’ phone numbers with Facebook users’ accounts.

On 20 December 2016, the Commission addressed a Statement of Objections to Facebook stating its concerns. The Commission found out that, contrary to Facebook’s statements in the 2014 merger review procedures, the technical possibility of automatically matching Facebook and WhatsApp users’ account has been in existence since 2014, and that Facebook staff were even aware it.

And this is the first time the commission is imposing a fine on firm for incorrect information since the entry of the 2004 Merger Regulation.

Well, Facebook responded to the allegation saying "We’ve acted in good faith since our very first discussions with the European Commission and we have always provided accurate information every time. The errors we made in our 2014 statement were not intentional and the Commission has confirmed that they did not impact the result of the merger review as today’s announcement has brought the issue to a close."

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