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Facebook was fined 110 million Euros

Technology
Paris - Facebook was fined 110 million Euros ($122 million) by the European Union for misleading regulators during a 2014 review of the WhatsApp messaging service takeover on the same day the EU threatened to heavily penalize, Patrick Drahi’s Altice NV for implementing for a second time a deal before getting regulatory clearance.

The European Commission won’t overturn approval for the $22 billion WhatsApp purchase as “the incorrect or misleading information provided by Facebook did not have an impact on the outcome of the clearance decision,” the regulator said Thursday in an emailed statement.

The Facebook fine “sends a clear signal to companies that they must comply with all aspects of EU merger rules, including the obligation to provide correct information,” EU Competition Commissioner Margrethe Vestager said. She added in a Bucharest speech that Facebook’s cooperation with EU officials earned it a lower fine.

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Read also: Facebook fined 150 000 euros 

Altice, which was already fined 80 million Euros last year in France for jumping the gun in its takeover of French phone carrier SFR Group SA, was sent a statement of objections by the EU accusing it of similar misdeeds in relation to the acquisition of telecommunication operator PT Portugal.

The commission suspects Altice may have even implemented the merger prior to its notification to the EU in some instances. Drahi’s company risks a fine of as much as 10 percent of Altice’s annual worldwide sales but the EU’s conditional clearance of the PT Portugal deal in 2015 won’t be affected.

Decisive Influence

The commission said it considers that the purchase agreement between the two companies put Altice in a position to exercise decisive influence over PT Portugal before notification or clearance of the transaction, and that in certain instances Altice actually exercised decisive influence over PT Portugal.

Altice doesn’t agree with the commission’s preliminary conclusions and will submit a full response to the EU, the company said in statement. Vestager targeted Facebook after it announced privacy policy changes in August that would allow the advertising platforms on Facebook and Instagram to draw upon data from WhatsApp.

The company informed the EU in 2014 it couldn’t combine WhatsApp data with its other services but moved to do that last year. The fine from Europe’s powerful antitrust authority caps months of probes from privacy regulators over the WhatsApp data move.

Facebook agreed to suspend using data from British users of WhatsApp last year amid UK scrutiny. EU data protection regulators also said Facebook must stop processing user data while they investigate the privacy changes. The U.S. Federal Trade Commission also got a complaint from privacy groups claiming Facebook’s move violates US law on unfair and deceptive practices.

Facebook said the firm “acted in good faith” in its interactions with the commission.

“The errors we made in our 2014 filings were not intentional and the commission has confirmed that they did not impact the outcome of the merger review,” a Facebook spokesman said. “Today’s announcement brings this matter to a close.”

The social network company said it wouldn’t appeal the EU decision.

Vestager, who has the power to levy millions of Euros in fines, is proving a tough watchdog over large technology companies and multibillion deals that need to win her approval. She’s weighing three investigations into Google Inc. and ordered the payment of some 13 billion Euros in back taxes from Apple Inc. last year. She’s also blocked three mergers and wrested big concessions from others to allay antitrust concerns.

Companies are required to provide accurate information to regulators during a merger probe. 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.

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.

Facebook was slapped with France’s maximum privacy fine on Tuesday over other data-protection issues in a concerted clampdown by regulators across Europe. The company agreed under Dutch pressure to stop targeting ads based on users’ sexual orientation, the Dutch privacy authority said.


 

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