FACEBOOK HAS been accused of misleading regulators over its $19bn (later upped to $22bn) takeover of mobile chat platform WhatsApp.
The European Commission is investigating the possibility that Facebook either out-and-out lied or negligently withheld data that was relevant to the takeover, specifically regarding the company's ability to swipe data from the app to power its "personalisation".
Facebook will have until the end of January next year to respond to a "Statement of Objections" which will then potentially lead to a full investigation.
If it turns out that Facebook really did lead the commission a merry dance, it could impose a fine equivalent to 1 percent of turnover, or $180m based on 2015 revenue.
The Commission has a history of not letting tech companies get away with much. Microsoft's Browser Ballot system was added as a result of a ruling over anti-competitive practices from the Commission, and Google is currently under investigation for being a market hog too.
The commission statement explains, "When reviewing Facebook's planned acquisition of WhatsApp, the Commission looked, among other elements, at the possibility of Facebook matching its users' accounts with WhatsApp users' accounts. In its notification of the transaction in August 2014 and in a reply to a request of information, Facebook indicated to the Commission that it would be unable to establish reliable automated matching between the two companies' user accounts. While the Commission took this information into account in its review of the transaction, it did not only rely on that information when clearing the transaction"
However, in an update to terms and conditions for WhatsApp in August, the company included a new clause stating that it could link Whatsapp IDs with Facebook IDs using phone numbers.
The commission argues therefore that Facebook knew they would be able to do this all along and misled the commission.
It states, "A company's obligation to provide correct and non-misleading information in a merger investigation is essential for the Commission to review mergers and takeovers effectively. Notifications and information requests are the primary sources of information for the Commission's review of such transactions. Under the tight deadlines of a merger investigation, it is particularly important that the Commission can rely on the accuracy and completeness of the information provided, regardless of whether it has an impact on the outcome of the assessment."
Facebook is yet to respond. µ
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