2018 Archive

Facebook gets a dent of $122 million by EU for the reason of misleading the public on the topic of Whatsapp acquisition


Antitrust Wing of European Commission sued the business tycoon, Facebook for spreading the misleading news about the acquisition of Whatsapp. The social media giant has got a dent of $122 million in this case.

The problem actually was that the Facebook claimed some 3 years ago that there are several technological barriers that they need to overcome in order to match the existing Facebook accounts with the WhatsApp accounts. As the company had plans ready at that time about the acquisition, the Brussels’ competition chief Margrethe Vestager negated the fact right from the start. The commission also released a statement regarding the matter.

The commission has found that… the technical possibility of automatically matching Facebook and WhatsApp users’ identities already existed in 2014, and that Facebook staff were aware of such a possibility.

Rise Of The Issue

The issue actually rose when Vestager felt the problem after Facebook changed its stance which it claimed while acquiring Whatsapp. The company said that nothing will be changed as a result of acquisition but after the acquisition, WhatsApp released some new terms of service that were in favor of Facebook’s targeted advertising campaign. This was the reason that compelled Vestager to check the credibility of Facebook’s statement and the following statement was released in this regard.

the Commission considers that Facebook staff were aware of the user matching possibility and that Facebook was aware of the relevance of user matching for the commission’s assessment, and of its obligations under the Merger Regulation. Therefore, Facebook’s breach of procedural obligations was at least negligent.
The commission has also considered the existence of mitigating circumstances, notably the fact that Facebook cooperated with the commission during the procedural infringement proceedings. In particular, in its reply to the commission’s Statement of Objections, Facebook acknowledged its infringement of the rules and waived its procedural rights to have access to the file and to an oral hearing. This allowed the commission to conduct the investigation more efficiently. The commission has taken Facebook’s cooperation into account in setting the level of the fine.

On the basis of these factors, the commission has concluded that an overall fine of €110 million is both proportionate and deterrent.

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