Facebook now has been charged with misleading the EU about its $22 billion acquisition of WhatsApp in 2014. At that time, the social media giant claimed that it would not be able to tie together the user IDs; hence, they had to combine the data from the two services.
Facebook accused of misleading EU
On Tuesday, competition officials in Brussels issued a charge sheet against the U.S. firm, alleging that the company failed to reveal that the technical probability of matching Facebook users’ IDs automatically with WhatsApp users’ IDs already existed at the time of the acquisition. Antitrust Chief Margerthe Vestager said companies must give accurate information during routine competition probes into planned acquisitions and must take this obligation very seriously.
“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,” Vestager said.
According to Arstechnica, the commission has slapped the tech giant with a so-called Statement of Objections. It claims that the social networking giant negligently or intentionally submitted misleading or incorrect information to the EC’s competition wing, thereby breaching its obligations under the EU Merger Regulation.
A Facebook spokesperson, however, said that they have consistently provided correct data about their technical plans and capabilities. The spokesman added that they respect the commission’s process and are confident that a full review of the facts will confirm that the tech giant has acted in good faith.
No impact on WhatsApp merger
Facebook has until January to reply to the accusation that it breached the EU’s procedural rules for the approval of mergers. The probe will not have any impact on its approval on the merger, said the commission, but if the allegations are confirmed, the social networking site could be fined up to 1% of its worldwide revenue. Based on Facebook’s 2015 revenue, it could be amount to approximately $179 million, says The Wall Street Journal.
After Facebook’s response, the EU’s antitrust arm will decide whether the U.S. firm was guilty of providing inaccurate and misleading information or not and whether it should assess a fine. Then the decision can be appealed in court.
In August, the messaging service WhatsApp confirmed that it is planning to merge user phone numbers with Facebook user accounts. It claimed at that time that the data would be used to provide users more relevant Facebook ads, new friend suggestions and new “ways for people to communicate with businesses” via the application.