On 18 May 2017, the European Commission fined €110 million Facebook for providing misleading information during the 2014 takeover of WhatsApp in case COMP/M.7217. Calling it a “proportionate and deterrent fine”, the Commission established that Facebook infringed the procedural obligations laid down by the EU Merger Regulation.
Most notably, this decision follows the 2016 WhatsApp terms of service and privacy update, which included the automatic linking of WhatsApp users’ data with Facebook users’ identities for advertising and marketing purposes. When Facebook notified the acquisition of WhatsApp to the Commission in 2014 under the EU Merger Regulation, which requires undertakings to provide correct information to allow a timely and effective review of the merger process, it ensured an automated matching between Facebook and WhatsApp users could not be established.
Although it could impose a fine of up to 1% of the company’s aggregated turnover (it could have amounted to more than €250 million), the European Commission’s assessment was mitigated by Facebook’s cooperation during the investigation proceedings, where the company acknowledged its infringement and convinced the authority to reduce the amount of the penalty. The EU’s competition watchdog concluded that Facebook negligently provided incorrect information, but the gravity of these infringements would not affect the Commission’s clearance decision regarding the WhatsApp acquisition of 2014.
WhatsApp has now 60 days for filing an appeal against the two ICA decisions before the Administrative Court of Lazio.