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Facebook fined for misleading EU over WhatsApp

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Facebook fined for misleading EU over WhatsApp


(BRUSSELS) - The European Commission fined Facebook EUR 110m Thursday for providing misleading information during the Commission's 2014 investigation of Facebook's acquisition of WhatsApp.

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. 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.

In a 2016 Statement of Objections to Facebook, the EU executive 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.

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. The Commission says this obligation applies, regardless of whether the information has an impact on the ultimate outcome of the merger assessment.

"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," said Competition Commissioner Margrethe Vestager. "The Commission must be able to take decisions about mergers' effects on competition in full knowledge of accurate facts," she added.

However, the Commission is clear that the fine will have no impact on the Commission decision to authorise the transaction under the EU Merger Regulation in 2014. It also considers that, while relevant, the incorrect or misleading information provided by Facebook did not have an impact on the outcome of the clearance decision.

This is the first time the Commission has adopted a decision imposing fines on a company for provision of incorrect or misleading information since the entry into force of the 2004 Merger Regulation.

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