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Facebook faces EU fine over WhatsApp data-sharing

Facebook faces a potential fine after the European Commission accused the social network of being misleading during the approval process of its $19bn takeover of WhatsApp.

In a “statement of objections” on Tuesday, the European Commission charged the Silicon Valley giant with inaccurately claiming during the 2014 takeover that it was technically impossible to combine automatically user information from Facebook and WhatsApp.

Facebook surprised its users this summer by linking WhatsApp phone numbers with identities on its Facebook service, in a move that sparked complaints from users, regulators and rivals.

The charges mark the boldest move yet by EU authorities against the controversial move. Data protection agencies across the EU had previously attacked the decision, demanding further information from the social network, leading to Facebook halting the process in Europe.

Margrethe Vestager, the 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,” said a spokesperson.

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 US tech competition cases that have already ensnared Google, Amazon, Apple and Microsoft. This has sparked a long-running diplomatic stand-off between Brussels and Washington, which has accused the EU of singling out US businesses.

Facebook had avoided the brunt of 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 until today.

Facebook first notified EU officials of its planned changes to its privacy policy in January — seven months before they were announced publicly in August. The company said that the decision was primarily taken to help it do things such as determine user numbers more accurately, rather than serve targeted ads.

But the decision triggered immediate concern among regulators, with the commission pledging to look again at commitments made during the takeover process. Earlier 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.”

In a statement following the charges, 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. We’re pleased that the commission stands by its clearance decision, and we will continue to co-operate and share information officials need to resolve their questions.”

Via FT