EU Alleges Facebook Provided Misleading Info Over WhatsApp Takeover

The European Commission is investigating whether Facebook Inc. provided misleading information about its takeover of WhatsApp. The allegations are limited in scope and will not change the commission’s decision to clear the acquisition.

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The EU’s executive body on Tuesday gave Facebook until Jan. 31 to respond to the Statement of Objections about merger information that given to Commission two years ago. Facebook could face fines of up to 1% of its turnover (under Article 14(1) of the EU Merger Regulation) or about $247 million ($US179 million) based on 2015 revenues (pdf) if those suspicions are confirmed. The Hamburg data protection authority ordered Facebook to stop collecting WhatsApp data (paywall) in September. WhatsApp data was being collected without the explicit consent of users, the regulator said.

“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.“

The European Commission is concerned that Facebook can match its users’ accounts with WhatsApp user accounts. Facebook said in 2014 that it didn’t have the technical ability to reliably match accounts belonging to users on both platforms due to technical barriers, including WhatsApp’s plan to encrypt all its users’ communications, which was completed in April 2016. But WhatsApp’s August terms of service and privacy policy update regarding the possibility of linking WhatsApp user phone numbers with Facebook user identities, according to the Commission.

“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,” EU Competition Commissioner Margrethe Vestager said in a 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 this year,” Facebook said. “We’re pleased that the Commission stands by its clearance decision, and we will continue to cooperate and share information officials need to resolve their questions.”

The August update could allow a matching between WhatsApp phone numbers and Facebook user identities, which allowing Facebook to offer better friend suggestions or displaying more relevant ads on WhatsApp users’ Facebook accounts.

Such EU probes do not imply guilt, but they give companies the chance to examine relevant documents, reply in writing or request an oral hearing to present their comments on the case to representatives of the Commission and the national competition authorities.

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Source:
European Commision Press Release: Mergers: Commission alleges Facebook provided misleading information about WhatsApp takeover
Firstpost: EU accuses Facebook of misleading information over WhatsApp data sharing policy
South China Morning Post: Facebook accused of misleading EU in WhatsApp takeover probe
news.com.au: Facebook’s WhatsApp takeover queried
QUARTZ: The EU is charging Facebook for misleading it over the WhatsApp deal
The Kansas City Star: EU watchdog probes Facebook over WhatsApp merger