On 18 May 2017, the European Commission fined Facebook € 110 million for providing misleading information under the EU Merger Regulation.
During its merger review of Facebook's acquisition of WhatsApp in 2014, the Commission examined whether Facebook might be able to technically integrate or combine the separate user networks of Facebook and WhatsApp into one, substantially larger network. Third parties suggested to the Commission that it would be relatively easy for Facebook to implement such technical integration. However, Facebook submitted both in its merger notification and in response to a specific request for information that integration of Facebook users' accounts with WhatsApp users' accounts would pose significant technical difficulties.
The transaction was ultimately cleared by the Commission in October 2014. WhatsApp later implemented updates to its terms of service and privacy policy in August 2016, including the possibility of linking WhatsApp users' phone numbers with Facebook users' identities. Following this update, the Commission took the preliminary view that Facebook had provided it with misleading information during the merger review (See VBB on Competition Law, Volume 2016, No. 12, page 4, available at www.vbb.com).
Further to an investigation, the Commission has now concluded that Facebook was aware during the merger review that it was technically possible to automatically match Facebook and WhatsApp users' identities. The Commission considered that Facebook's information provided during the review was at least negligent and fined it € 110 million. The amount of the fine was apparently lower than it could have been, as the Commission took into account the extent of the cooperation provided by Facebook during the investigation, including by acknowledging the infringement in its response to the Statement of Objections and by waiving its procedural rights to have access to the file and to an oral hearing. The case is noteworthy as this is the first time that the Commission has fined a company for providing incorrect or misleading information under the current version of the EU Merger Regulation adopted in 2004.
Also, in a separate case, on 11 May 2017, the Italian Competition Authority fined WhatsApp € 3 million for a violation of Italian consumer law as it deemed that WhatsApp unlawfully "forced" its users to accept new terms of use and to agree to share personal data with Facebook in the August 2016 update.
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