The European Commission has accused Facebook of providing misleading information during the competition review of its takeover of WhatsApp in 2014. The Commission claims that Facebook lied when it said in 2014 that it was not able to reliably match WhatsApp user accounts with Facebook users.
The proof appears to be that WhatsApp announced in August this year that it would start linking WhatsApp user phone numbers with Facebook user identities in order to improve services, for example, allowing Facebook to offer better friend suggestions or displaying more relevant ads on WhatsApp users' Facebook accounts. In a statement of objections sent to Facebook, the Commission said it was concerned that Facebook intentionally, or negligently, submitted incorrect or misleading information on this to the Commission at the time of the original merger review.
The Commission noted that the case is currently only about breaching EU merger regulation procedures, and as other factors were taken into account when it decided to clear the takeover, the Commission's original decision is not affected. Facebook has until 31 January 2017 to respond to the statement of objections. If the Commission then confirms its preliminary concerns, it could impose a fine against the company of up to 1 percent of Facebook's turnover in the EEA.
The EC's investigation is one of several started against Facebook and WhatsApp after the companies said in August that they would start working more closely. Data protection regulators in individual countries such as Germany, Spain, Italy and the UK as well as the so-called Article 29 group uniting all EU privacy regulators have asked the companies to halt or explain the purpose of sharing user data. The concerns centre on what Facebook plans to do with the data - for example, if it would be shared with advertisers as well - and how long Facebook would keep the personal information. WhatsApp has since suspended the practice in the EU.
