Facebook Fined EUR 110m for Misleading EC over WhatsApp

Facebook has been fined EUR 110 million by the European Commission, for providing misleading information when it acquired WhatsApp, in 2014.

The social network told the EC at the time of the proposed acquisition that it would be unable to establish reliable automated matching between user accounts of the two services, and reiterated this in response to a specific request for information from the Commission. However, in August 2016 WhatsApp announced updates to its terms of service and privacy policy, including sharing user information with Facebook, whose corporate advertising clients might then use it to improve their ad targeting- the firm said it was 'part of its commitment to giving users the 'most reliable experience', and would allow it to 'track basic metrics about how often people use services', 'better fight spam', 'offer better friend suggestions' and 'show more relevant ads'.

This week the Commission ruled that 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. Commissioner Margrethe Vestager said the 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'. However the EC said the decision has 'no impact on its October 2014 decision to authorise the transaction under the EU Merger Regulation'.

EU rules allow the Commission to impose fines of up to 1% of the aggregated turnover of companies in such cases - Facebook turned over $27.6 bn in 2016 so the fine is less than half the maximum possible, reflecting the company's 'cooperation ...during the procedural infringement proceedings' and its 'acknowledgement of its infringement of the rules'. This is nevertheless the first time a company has been fined under this provision of the 2004 Merger Regulation since it came into effect.

Facebook said the announcement of the fine 'brings this matter to a close'. The firm has also this week been fined a tiny EUR 150,000 by a French data watchdog for failing to prevent advertisers from accessing user data, and WhatsApp was last week slapped with a EUR 3m levy by Italian antitrust authorities for reportedly requiring users to agree to share their personal data with its parent firm. Other actions similar to the French fine are in progress in a number of European states, but Facebook continues to insist that 'putting people in control of their privacy is at the heart of everything we do', and says it has recently 'simplified our policies further to help people understand how we use information to make Facebook better'.

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.