Facebook faces a potential fine after Brussels accused the social network of misleading it during the approval process of its $19bn takeover of WhatsApp.
In a “statement of objections”, the European Commission charged the Silicon Valley group with inaccurately claiming during the 2014 takeover that it was technically impossible to combine user information from Facebook and WhatsApp automatically.
Facebook sprang a surprise this year by linking WhatsApp phone numbers with identities on its Facebook service in a change that sparked complaints from users, regulators and rivals.
The charges mark the boldest reaction by EU authorities to the move. Data protection agencies across the EU had already attacked the decision, demanding further information, prompting Facebook to halt the process in Europe.
Margrethe Vestager, EU competition chief, said: “Companies are obliged to give the commission accurate information during merger investigations. They must take this obligation seriously.”
Brussels allowed the deal with no conditions attached, in part because of Facebook’s insistence that it was not able to combine user accounts.
Facebook said it had behaved properly in the process. “We respect the commission’s process and are confident that a full review of the facts will confirm Facebook has acted in good faith.”
Although the commission said it would not reverse its decision to approve the deal, it made clear that EU rules allowed fines of up to 1 per cent of global turnover in such cases – which would be roughly $125m, based on Facebook’s 2014 annual revenues.
The charges come after a string of competition cases that have ensnared Google, Amazon, Apple and Microsoft. These have sparked a diplomatic stand-off between Brussels and Washington, which has accused the EU of singling out US businesses.
Facebook had largely avoided becoming ensnared in this regulatory tussle. While data protection authorities across Europe have pursued Facebook over privacy issues, the EU’s executive arm had broadly steered clear of the social network.
Facebook notified EU officials of the planned changes to its privacy policy in January, seven months before they were announced publicly. The company said the decision was primarily taken to help it compile data, such as on user numbers, more accurately, rather than serve targeted ads.
But the decision triggered immediate concern among regulators. This year, Ms Vestager warned: “That they didn’t merge data wasn’t the decisive factor when the merger was approved, but it was still a part of the decision.”
Facebook said: “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.”
