Tuesday, 20 December 2016

Facebook faces €200m fine for ‘misleading’ EU in Whatsapp buyout

The European Union charged Facebook on Tuesday with
providing “misleading” information when it sought approval
for its blockbuster $22bn buyout of the WhatsApp mobile
messaging service.

The European Commission said the EU’s greenlight of the
buyout, announced in October 2014, was not in jeopardy but
the social network could face almost two hundred million
euros in fines.

With the charge, Facebook joins Apple, Google, Amazon and
Microsoft among the US-based tech giants caught in major
EU competition probes.

“The European Commission has sent a Statement of
Objections to Facebook alleging the company provided
incorrect or misleading information during the Commission’s
2014 investigation” of the buyout, the EU’s executive arm
said in a statement.

Facebook is accused of misleading the EU with a claim that it
was technically impossible for it to merge users between the
two services.

But WhatsApp in August said that it would begin sharing
data with Facebook, in a bid to allow better-targeted
advertising and to fight spam on the platform.

The update by WhatsApp raises “concerns that Facebook
intentionally, or negligently, submitted incorrect or
misleading information to the commission,” the EU said.

The company has until January 31 to respond to the charge
sheet. It faces a fine of one percent of annual sales, which
stood at a whopping $18 billion in 2015.

“We respect the Commission’s process and are confident
that a full review of the facts will confirm Facebook has acted
in good faith,” a Facebook spokesperson said in an email.

The rare accusation by Brussels comes after the EU’s
powerful competition chief Margarethe Vestager said she
“will keep a close eye on how companies use data”.

The commission is worried that the value of user data is
underestimated in tech mergers, though Brussels waved
through the recent buyout of LinkedIn by Microsoft despite
these concerns.

Tensions between Brussels and Washington have sharpened
since EU regulators turned a focus on US tech companies.

Vestager in August ordered Apple to pay back 13 billion
euros in taxes and her teams are running several cases
against Google.


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