Facebook Accused of Misleading EU in WhatsApp Takeover Probe
Facebook Accused of Misleading EU in WhatsApp Takeover
Probe
Social network may have given ‘incorrect or misleading’
info
Facebook could face EU fine of up to 1% of yearly revenue
by Aoife White December 20, 2016, 3:02 AM PST December
20, 2016, 7:08 AM PST
Facebook Inc. risks a multimillion-euro fine for
allegedly misleading European Union merger watchdogs when it won approval to
buy the WhatsApp messaging service in 2014.
The EU’s antitrust authority said Tuesday it suspects
Facebook supplied "incorrect or misleading information" on linking
data with WhatsApp as officials investigated the tie-up two years ago. Approval
for the $22 billion deal isn’t under threat, regulators said.
EU Competition Commissioner Margrethe Vestager is
escalating the probe after officials quizzed Facebook over privacy policy
changes announced in August that would allow the advertising platforms on
Facebook and Instagram to draw upon data from WhatsApp. The Menlo Park,
California-based company informed the EU in 2014 it couldn’t combine WhatsApp
data with its other services -- a move it made earlier this year.
“These are serious allegations,” said Agustin Reyna of
the European consumer advocate group BEUC. “If Facebook provided misleading
information about its ability to match Facebook and WhatsApp accounts it
basically blocked the commission from checking the implications of data of this
merger. This is unacceptable and sheds a bad light on the company’s readiness
to respect consumers’ privacy."
‘Good Faith’
The U.S. company is "confident that a full review of
the facts will confirm Facebook has acted in good faith," it said in an
e-mailed statement Tuesday. "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."
Facebook informed regulators in August 2014 that it
wouldn’t be able to establish "reliable automated matching between the two
companies’ user accounts," the EU said. The European Commission now says
this was technically possible at the time. Facebook has until Jan. 31 to
respond to the EU’s statement of objections.
The punishment for breaking the rules is as high as 1
percent of annual sales. Tetra Laval BV paid a 90,000 euro penalty in 2004 for
not informing the EU about technology it owned.
‘Tangible Consequences’
Markus Ferber, a German member of the European
Parliament, said Facebook should face "tangible consequences" if the
probe shows it deliberately made false statements, according to an e-mailed
statement. EU regulators were also wrong "to ignore the important role
played by data for companies in the digital economy," he said.
The EU’s merger authorities have usually shunned calls
for them to examine concerns over data privacy. Their review of the WhatsApp
deal only examined how Facebook’s control of data might strengthen its position
in online advertising, determining that there was no overlap between the
companies and that WhatsApp didn’t collect any user data valuable for
advertisers nor would the deal increase the data available to Facebook’s ad
services.
The EU antitrust complaint caps a terrible year for
Facebook in Europe as regulators took aim at how it uses personal data and
shares posts that may incite hatred. Germany opened an antitrust investigation
in March to check whether the company unfairly forces users to sign up to
restrictive privacy terms.
Facebook was then ordered in October to stop combining
data with WhatsApp as privacy authorities across Europe examined the company’s
change in policy. Germany is separately threatening new laws to prevent sharing
of fake news and hate speech online.
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