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.
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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