tech2 News StaffDec 21, 2016 09:36:32 IST
The European Commission has alleged that Facebook gave misleading or untrue answers during the investigation to approve the WhatsApp acquisition by Facebook in 2014. The European Commission evaluated various issues with regard to the acquisition, and also sought feedback from rivals. The acquisition was approved by the European Union considering the various issues involved, and the new investigation will have no impact on the decision.
The European Commission has an issue with the response Facebook gave when asked for information on linking WhatsApp user data with that of Facebook. Facebook had indicated that there was no way to reliably link the two databases, and use the phone numbers registered in WhatsApp with Facebook profiles. The European Commission cleared the acquisition, but did not rely on the information provided by Facebook while allowing the deal to go ahead.
The move was met with an imposition of conditions by the Delhi High Court in India. Italy launched an investigation into the move, to check if the data sharing imposed unfair conditions on the users. Germany asked WhatsApp to delete the data, and that Facebook was not authorised to use the data. Following widespread concerns across Europe, WhatsApp temporarily halted sharing data with Facebook.
Now the European Commission says that Facebook was already aware of the capability to match WhatsApp user data with Facebook accounts using software automation, and had mislead the original investigation at the time of seeking approval for the acquisition in 2014. This is a serious charge as companies are obliged to provide information they know to be truthful. Facebook has till 31 January 2017 to respond to the allegations. Under the merger regulations, the European Commission can slap a fine of 1 percent of the annual turnover of Facebook. For 2017, Facebook revenues almost touched 18 billion dollars, which could work out to a fine in excess of 180 million dollars, considering the year on year increase in Facebook revenues.
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"Companies are obliged to give the Commission accurate information during merger investigations. They must take this obligation seriously," said Commissioner Margrethe Vestager, in charge of competition policy. " Our timely and effective review of mergers depends on the accuracy of the information provided by the companies involved. In this specific case, the Commission's preliminary view is that Facebook gave us incorrect or misleading information during the investigation into its acquisition of WhatsApp. Facebook now has the opportunity to respond."
The European Commission contends that Facebook already had the technical capabilities of automatically matching the WhatsApp database with the Facebook Database. The responses provided by Facebook during the investigation of the merger are in breach of the obligations by Facebook during EU merger investigations. The Statement of Objections does not amount to a judgement on the matter, and Facebook can send a written response or request an oral hearing. There is no stipulated legal deadline for winding up the investigations.
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