The WhatsApp and Facebook apps are displayed on a iPhone. (Pic: Justin Sullivan, AFP)
Luxembourg - Facebook was fined €110m ($122m) by the European
Union for misleading regulators during a 2014 review of the WhatsApp
messaging service takeover on the same day the EU threatened to heavily
penalise Patrick Drahi’s
Altice for implementing for a second time a deal before getting
The European Commission won’t overturn approval for the $22bn
WhatsApp purchase as “the incorrect or misleading information provided
by Facebook did not have an impact on the outcome of the clearance
decision,” the regulator said on Thursday in an emailed statement.
The Facebook fine “sends a clear signal to companies that they must
comply with all aspects of EU merger rules, including the obligation to
provide correct information,” EU Competition Commissioner
Margrethe Vestager said. She added in a Bucharest speech that Facebook’s
cooperation with EU officials earned it a lower fine.
Altice, which was already fined €80m last year in France
for jumping the gun in its takeover of French phone carrier SFR Group, was sent a statement of objections by the EU accusing it of similar
misdeeds in relation to the acquisition of telecommunication operator PT
The commission suspects Altice may have even implemented the merger
prior to its notification to the EU in some instances. Drahi’s company
risks a fine of as much as 10% of Altice’s annual worldwide sales
but the EU’s conditional
clearance of the PT Portugal deal in 2015 won’t be affected.
The commission said it considers that the purchase agreement between
the two companies put Altice in a position to exercise decisive
influence over PT Portugal before notification or clearance of the
transaction, and that in certain instances Altice actually exercised
decisive influence over PT Portugal.
Altice doesn’t agree with the commission’s preliminary conclusions
and will submit a full response to the EU, the company said in
that would allow the advertising platforms on Facebook and Instagram to
draw upon data from WhatsApp. The company informed the EU in 2014 it
couldn’t combine WhatsApp data with its other services but moved to do
that last year.
READ: Facebook profits surge as user base nears 2 billion
The fine from Europe’s powerful antitrust authority caps months of
probes from privacy regulators over the WhatsApp data move. Facebook
suspend using data from British users of WhatsApp last year amid UK
EU data protection regulators also said Facebook
must stop processing user data while they investigate the privacy
changes. The US Federal Trade Commission also got a complaint from
privacy groups claiming Facebook’s move violates US law on unfair and
Facebook said the firm “acted in good faith” in its interactions with the commission.
“The errors we made in our 2014 filings were not intentional and the
commission has confirmed that they did not impact the outcome of the
merger review,” a Facebook spokesperson said. “Today’s announcement brings
this matter to a close.”
The social network company said it wouldn’t appeal the EU decision.
The commission’s decision “signals that it means business when it
comes to enforcing the merging parties’ obligation to provide accurate
information,” said Nelson Jung, an antitrust lawyer at Clifford Chance.
“This substantial fine materially exceeds any fine the commission has
previously imposed where companies have failed to notify a merger.”
READ: Here are 6 big changes coming to WhatsApp
Given the commission didn’t review its merger approval decision “it
is not clear whether there could have been anti-competitive aspects to
the merger which may be harming consumers,” said Jung.
European consumer group BEUC on Thursday said “it is crucial” that
competition authorities look more closely into the possible harm a
merger of data-heavy companies could cause.
“It is unacceptable that consumers are continuously exposed to the
misuse of their data by Facebook,” said Monique Goyens, the group’s
director general. “It is very disappointing that the commission decided
not to revise its original decision on the Facebook merger with
Vestager, who has the power to levy millions of euros in fines, is
proving a tough watchdog over large technology companies and
multibillion deals that need to win her approval. She’s weighing three
Google and ordered the payment of some 13 billion euros in back
taxes from Apple last year. She’s also blocked three mergers and
wrested big concessions from others to allay antitrust concerns.
Companies are required to provide accurate information to regulators
during a merger probe. Facebook informed regulators in August 2014 that
it wouldn’t be able to establish "reliable automated matching between
the two companies’ user accounts," the EU said. The European Commission
now says this was technically possible at the time.
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The EU’s merger authorities have usually shunned calls for them to
examine concerns over data privacy. Their review of the WhatsApp deal
only examined how Facebook’s control of data might strengthen its
position in online advertising, determining that there was no overlap
between the companies and that WhatsApp didn’t collect any user data
valuable for advertisers nor would the deal increase the data available
to Facebook’s ad services.
slapped with France’s maximum privacy fine on Tuesday over other
data-protection issues in a concerted clampdown by regulators across
The company agreed under Dutch pressure to stop targeting ads
based on users’ sexual orientation, the Dutch privacy authority said.
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