The European Commission has fined Facebook over $122 million for intentionally misleading officials over its ability to utilize data when it bought acquisition of WhatsApp in 2014. The social media giant becomes the first company to be penalized under the Commission’s Merger Regulation law since it was introduced in 2004.
According Engadget,The case, which was opened in December 2016, focused on Facebook’s admission that it would be unable to reliably automate the sharing of data between a user’s Facebook and WhatsApp accounts. However, in August 2016 — nearly two years after the companies had merged — Facebook announced an update to its terms of service, noting that it could link WhatsApp users’ phone numbers to their Facebook profile. The Commission filed a Statement of Objections three months later.
According to today’s statement, Facebook was judged to have lied on two occasions. The first was when it submitted documentation immediately after it asked the Commission (and competing companies) to investigate the deal. The second came in its response to Statement of Objections filed in December.
“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. And it imposes a proportionate and deterrent fine on Facebook,” said Commissioner Margrethe Vestager. “The Commission must be able to take decisions about mergers’ effects on competition in full knowledge of accurate facts.”
Under EU rules, the Commission can impose a fine of up to one percent of the aggregated turnover of companies that “intentionally or negligently provide incorrect or misleading information.” However, it did note that Facebook admitted its guilt and waived its rights to access the case and to have an oral hearing, assisting officials where possible. The company also halted data-sharing across Europe, pledging to make it opt-in rather than requiring users to manually remove themselves from data harvesting.
Facebook responded to the ruling with the following statement: “We’ve acted in good faith since our very first interactions with the Commission and we’ve sought to provide accurate information at every turn. 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.”