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EU probes Facebook over WhatsApp

News, 22 December 2016

BRUSSELS: Facebook risks being fined up to 1% of its global turnover after the European Commission (EC) alleged that it provided incorrect or misleading information during the EC's review of its acquisition of WhatsApp in 2014.

The Commission, the EU's merger and anti-trust regulator, issued a formal Statement of Objections to Facebook, giving the social media giant until January 31, 2017, to respond to this preliminary view.

Specifically, the EC claims that in both its notification of the transaction in August 2014, and in a reply to a request for information, Facebook indicated that it was not technically possible to link WhatsApp user data and Facebook accounts.

However, it was reported in August that WhatsApp planned to change its privacy policy to allow it to do just that, in a move that prompted concern among users, regulators and others.

Margrethe Vestager, the EU Commissioner for Competition, said: "Companies are obliged to give the Commission accurate information during merger investigations.

"They must take this obligation seriously. Our timely and effective review of mergers depends on the accuracy of the information provided by the companies involved.

"In this specific case, the Commission's preliminary view is that Facebook gave us incorrect or misleading information during the investigation into its acquisition of WhatsApp. Facebook now has the opportunity to respond."

Facebook responded by saying it respected the Commission's process and expressed confidence that a full review of the facts will confirm that it acted in good faith.

"We've consistently provided accurate information about our technical capabilities and plans, including in submissions about the WhatsApp acquisition and in voluntary briefings before WhatsApp's privacy policy update this year," Facebook said in a statement.

As the two parties wait until early next year to resolve the matter, or not, the EC also made it clear that its current investigation is limited to whether there were breaches of procedural rules.

In other words, it will not affect the EC's original approval of the $22bn merger. Nor is it related to "neighbouring privacy, data protection or consumer protection issues".

Data sourced from European Commission, Facebook; additional content by Warc staff