Facebook provided "misleading information" about WhatsApp takeover, claims European Commission
Facebook provided "incorrect or misleading information" during the 2014 investigation of the social media giant's planned acquisition of WhatsApp, the European Commission (EC) has said.
The EC said that when reviewing Facebook's planned acquisition of WhatsApp, it looked at the possibility of Facebook matching its users' accounts with WhatsApp users' accounts, and said Facebook had indicated it would be unable to establish reliable, automated matching between the two companies' user accounts.
But in August 2016, WhatsApp announced, among other updates to its terms of service and privacy policy, the possibility of linking WhatsApp user phone numbers with Facebook user identities.
In the 'Statement of Objections' sent to Facebook today, the EC said it "takes the preliminary view that, contrary to Facebook's statements and reply during the merger review, the technical possibility of automatically matching Facebook users' IDs with WhatsApp users' IDs already existed in 2014."
It added: "At this stage, the Commission therefore has concerns that Facebook intentionally, or negligently, submitted incorrect or misleading information to the Commission, in breach of its obligations under the EU Merger Regulation."
Commissioner Margrethe Vestager, who is in charge of competition policy, said: "Companies are obliged to give the Commission accurate information during merger investigations. They must take this obligation seriously. Our timely and effective review of mergers depends on the accuracy of the information provided by the companies involved. 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 the opportunity to respond."
The EC said the current investigation will not have an impact on the merger itself, which was cleared in October 2014. Facebook now has now until 31 January 2017 to respond to the Statement of Objections. The EC said that if its preliminary concerns in this case were confirmed it could impose a fine of up to one percent of Facebook's turnover.
In a statement Facebook said: "We respect the Commission's process and are confident that a full review of the facts will confirm Facebook has acted in good faith. 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 cooperate and share information officials need to resolve their questions."