Facebook has been hit with a hefty fine for providing misleading information during its acquisition of WhatsApp in 2014.
The European Commission (EC) has fined Facebook €110m, a little more than half of what was possible, for providing misleading information ahead of its WhatsApp acquisition in 2014.
One of the biggest deals ever, Mark Zuckerberg’s company spent $19bn on instant messaging tool WhatsApp, with the latter returning $10.2m in revenues in the full year prior to the deal.
During the review process, the EC discussed the possibility of Facebook matching its users’ accounts with WhatsApp users’ accounts, to which Facebook replied that it “would be unable to establish reliable automated matching” between the two.
Since then, though, the company has found a way, and it seems pretty straightforward. Unhappy with this, the EC today (18 May) revealed a “proportionate and deterrent fine”. How it acts as a deterrent, however, is unclear.
Facebook was at risk of a fine totalling 1pc of its turnover, which would have been closer to €200m, but the figure was lower due to its compliance during the investigation.
“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,” the EC said.
The social media giant said the errors in its statement, for which it was fined, were not intentional and that the EC had confirmed they had not affected the outcome of the merger review, according to Reuters.
“Today’s announcement brings this matter to a close,” the company said.
— Margrethe Vestager (@vestager) May 18, 2017
Helen Dixon, Ireland’s Data Protection Commissioner and the lead EU regulator on privacy issues for the company (due to the Dublin location of the company’s European HQ), said in April that a resolution was due soon.
“I think we are in agreement with the parties – WhatsApp and Facebook – that the quality of the information provided to users could have been clearer, could have been more transparent and could have been expressed in simpler terms,” she said at the time.