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nitpicker

(7,153 posts)
Thu May 18, 2017, 05:18 AM May 2017

(EU) Commission fines Facebook 110 million (re) misleading information about WhatsApp takeover

http://europa.eu/rapid/press-release_IP-17-1369_en.htm

(European) Commission fines Facebook €110 million for providing misleading information about WhatsApp takeover

Brussels, 18 May 2017

The European Commission has fined Facebook €110 million for providing incorrect or misleading information during the Commission's 2014 investigation under the EU Merger Regulation of Facebook's acquisition of WhatsApp.
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The EU Merger Regulation obliges companies in a merger investigation to provide correct information that is not misleading as this is essential for the Commission to review mergers and takeovers in a timely and effective manner. This obligation applies, regardless of whether the information has an impact on the ultimate outcome of the merger assessment.

When Facebook notified the acquisition of WhatsApp in 2014, it informed the Commission that it would be unable to establish reliable automated matching between Facebook users' accounts and WhatsApp users' accounts. It stated this both in the notification form and in a reply to a request of information from the Commission. However, in August 2016, WhatsApp announced updates to its terms of service and privacy policy, including the possibility of linking WhatsApp users' phone numbers with Facebook users' identities.

On 20 December 2016, the Commission addressed a Statement of Objections to Facebook detailing its concerns. 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.
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The fine

According to the Merger Regulation, the Commission can impose fines of up to 1% of the aggregated turnover of companies, which intentionally or negligently provide incorrect or misleading information to the Commission.
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Facebook committed two separate infringements by providing incorrect and misleading information in the merger notification form and in the reply to a Commission request for information. The Commission considers that these infringements are serious because they prevented it from having all relevant information for the assessment of the transaction.

Moreover, the Commission considers that Facebook staff were aware of the user matching possibility and that Facebook was aware of the relevance of user matching for the Commission's assessment, and of its obligations under the Merger Regulation. Therefore, Facebook's breach of procedural obligations was at least negligent. The Commission has also considered the existence of mitigating circumstances, notably the fact that Facebook cooperated with the Commission during the procedural infringement proceedings. In particular, in its reply to the Commission's Statement of Objections, Facebook acknowledged its infringement of the rules and waived its procedural rights to have access to the file and to an oral hearing. This allowed the Commission to conduct the investigation more efficiently. The Commission has taken Facebook's cooperation into account in setting the level of the fine. On the basis of these factors, the Commission has concluded that an overall fine of €110 million is both proportionate and deterrent.


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