Late last year, the European Commission started an investigation into Facebook's merger with WhatsApp to learn whether or not the company could automatically link Facebook and WhatsApp accounts prior to the merger. The answer seems to be yes, as the Commission is now fining the social networking company €110 million ($122 million) over this violation.
Facebook And WhatsApp Merger
Last summer, WhatsApp announced that it was going to share information with Facebook for advertising purposes, breaking its initial promise not to do just that. This prompted multiple national data protection authorities in the European Union to open investigations and block Facebook's collection of WhatsApp data. The agencies felt that WhatsApp altered its deal with users in a significant way without giving them much time to evaluate the data sharing that Facebook was enabling.
WhatsApp made the data sharing opt-out by default, so you had to be aware that this was even happening, and you only had 30 days to act. Afterwards, your data would be fully shared with Facebook. Even if you opted-out, you would still be forced to share some basic information with Facebook.
European Commission Investigates Account Linking
Not long after, the European Commission opened its own investigation because it realized that Facebook provided incorrect information during the merger process, when the company said that it wouldn’t be able to link WhatsApp phone numbers to Facebook accounts.
According to the Commission, the fact that Facebook misled it about the account linking during the merger investigation was already grounds for sanctions under the EU Merger Regulation. The Commission said Facebook has acknowledged its infringement of the rules and waived its right to an oral hearing.
The Commission can impose fines of up to 1% of a company’s annual revenue when the company intentionally or negligently provides incorrect or misleading information to the Commission. The institution ended up imposing a fine of €110 million ($122 million) on Facebook, which is about 0.4% of the company’s revenue for 2016 ($27.6 billion).
When setting the level of the fine, the Commission said it took into account Facebook’s initial cooperation in the merger as well as the cooperation in this investigation. It also added that Facebook’s violation and the sanction shouldn’t affect the 2014 decision to clear the merger.
On-Going Investigations
The European Commission noted that today’s sanction is unrelated to other national antitrust or data protection investigations, which may arise following WhatsApp’s privacy policy update from August 2016.
Facebook was also recently fined by the French Data Protection Authority in an investigation related to its tracking of both users and non-users, across the web and without consent, through the Like button.
