Facebook Accused of Misleading EU in WhatsApp Takeover Probe

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Facebook 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 WhatsApp application is displayed on a iPhone next to Facebook.
The WhatsApp application is displayed on a iPhone next to Facebook. Credit: Getty Images

The EU's antitrust authority said in a statement Tuesday it suspects Facebook supplied "incorrect or misleading information" on linking data with WhatsApp when regulators cleared the tie-up two years ago. Officials said approval for the $22 billion deal isn't under threat.

Facebook is the latest U.S. technology giant in the EU's sights this year after it ordered Apple to repay some 13 billion euros ($13.5 billion) in back taxes and stepped up three separate antitrust investigations into Google's behavior.

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. "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."

Policy Changes

EU Competition Commissioner Margrethe Vestager said earlier this year that officials were quizzing 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, Calif.-based company said in 2014 it couldn't combine WhatsApp data with its other services -- a move it made earlier this year.

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 regulator now says this was technically possible at the time.

The penalty for breaking the rules is as high as 1% of annual sales. Facebook has until Jan. 31 to respond to the EU's statement of objections.

It 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.

--Bloomberg News

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