Facebook fined €110m for claiming it would not 'user match' in WhatsApp acquisition probe

Facebook has been fined €110m by European Union anti-trust regulators for providing incorrect or misleading information during an investigation into its $19bn deal to acquire instant messaging service WhatsApp in 2014.

Three years ago, Facebook informed the European Commission that it would be unable to establish reliable automated matching between Facebook users' accounts and WhatsApp users' accounts, if the deal to acquire WhatsApp went through.

However, in August last year, WhatsApp announced updates to its terms of service and privacy policy, including the possibility of linking WhatsApp users' phone number with Facebook users' identities.

In December, the Commission wrote to Facebook detailing its concerns. It had found that, contrary to Facebook's suggestion that it couldn't link Facebook and WhatsApp user identities - this was technically possible, and Facebook staff were aware of such a possibility.

It has therefore used the 2004 Merger Regulation for the first time, through which it can impose fines of up to one per cent of the aggregated turnover of companies, which intentionally or negligently provide incorrect or misleading information to the Commission.

The Commission said that Facebook had committed two separate infringements by providing incorrect and misleading information in the merger notification form and in the reply to a request for information. When determining the fine, it said that it considered that Facebook staff were aware of user matching possibility, which it said was "at least negligent" and that Facebook had cooperated with the Commission during the procedural infringement proceedings.

On that basis it said that the €110m fine was "both proportionate and deterrent".

"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. And it imposes a proportionate and deterrent fine on Facebook," said Commissioner Margrethe Vestager, who is in charge of competition policy.

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

The European authority said that today's fine had no impact on the decision to authorise the acquisition of WhatsApp under the EU Merger Regulation It claimed that it carried out an "even if" assessment that assumed user-matching as a possibility - suggesting that it would have cleared the acquisition anyway.

"The Commission therefore considers that, albeit relevant, the incorrect or misleading information provided Facebook did not have an impact on the outcome of the clearance decision".

It added that the decision was unrelated to any other antitrust procedures or privacy, data protection or consumer protection issues that could arise from the August 2016 update of WhatsApp terms of service and privacy policy.

Yesterday, the French data watchdog fined the social media company €150,000 for "unfair tracking". It is still under investigation in Belgium, Netherlands, Germany and Spain.