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Facebook could receive massive fine over ‘misleading’ WhatsApp takeover

Facebook has been accused of providing misleading information about its takeover of messaging service WhatsApp by the European Commission and could be fined one per cent of its annual turnover.

However, the statement of objections sent to Facebook will not have an impact on the approval of the $22bn (£18bn) merger in 2014, the Commission said.

Facebook becomes the latest Silicon Valley target of EU antitrust chief Margrethe Vestager, who has demanded Apple pay back $14bn in taxes to Ireland and hit Google with two market abuse investigations. 

The issue regards a WhatsApp privacy policy change in August when it said it would share some users’ phone numbers with parent company Facebook, triggering investigations by a number of EU data protection authorities.

The Commission said Facebook had indicated in its notification of the planned acquisition that it would be unable reliably to match the two companies’ user accounts.”

“In today’s Statement of Objections, the Commission takes the preliminary view that, contrary to Facebook’s statements and reply during the merger review, the technical possibility of automatically matching Facebook users’ IDs with WhatsApp users’ IDs already existed in 2014,” it said.

“The Commission’s preliminary view is that Facebook gave us incorrect or misleading information during the investigation into its acquisition of WhatsApp,” said Vestager, the EU’s competition commissioner.

Facebook has until 31 January to respond. If the Commission’s concerns are confirmed it can impose a fine on the US company of up to one percent of turnover. Companies fined can appeal to the European Court of Justice, which has overturned some penalties in the past.

“We respect the Commission’s process and are confident that a full review of the facts will confirm Facebook has acted in good faith, a Facebook spokeswoman said.

“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,” she added.

The company will continue to cooperate and give the information officials need to resolve their questions, she said.

In response to separate concerns from EU data protection watchdogs Facebook has agreed to stop sharing WhatsApp users’ information with Facebook for the purposes of improving Facebook products and advertising experiences.

The watchdogs wrote to the company last week asking for more information about the privacy policy change.

Meanwhile Facebook has begun rolling out group video calls to its users through its Messenger service.

The company said the feature has been their “most requested ever” and will enable up to six people at once to chat with one another via video.

The new feature will begin rolling out to Android and iOS mobile device users from today.

Messenger product manager Stephane Taine said: “This is the time of year to tell our friends and family how much we care about them and send best wishes for the year ahead.

“We’re delighted to bring you the ability to chat face-to-face with those who matter to you most, wherever they are.”

Facebook recently responded to increasing criticism over the circulation of fake news on its site and said it would introduce tools to tackle fictional news stories presented as fact. 

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