The EU has slapped Facebook with a $122 Million Dollar fine for giving misleading information during the vetting process to purchase WhatsApp. Facebook purchased WhatsApp in 2014 but now the European Union Antitrust regulators claim that Facebook gave misleading information at the time and has fined the social media giant $122 million dollars.
The case against Facebook
During the vetting process of a deal Facebook made to acquire WhatsApp, FB made certain statements that the EU considers misleading. The media company said at the time that it could not match user accounts on Facebook automatically with WhatsApp customers.
However, just two years later, FB introduced a service that was able to accomplish just that. The purchase of WhatsApp was cleared based partly on their statement to the commission, however, sanctions against the social media giant will not reverse the decision that gave the go ahead for the purchase.
The commission findings
The European Union uncovered discrepancies between the FB statement during the merger review process and what occurred just two years after the purchase. The commission found that technology to automatically match WhatsApp and Facebook users identities existed in 2014 and that Facebook knew it existed when they gave contradictory information. Facebook could have been fined double the amount but as they cooperated with the investigation and admitted to the infringement, they were fined the lower amount.
Facebook purchase of WhatsApp
The 19 billion acquisition of WhatsApp was the result of a deal made between Mark Zuckerberg and founders of the messaging service Jan Koum and Brian Acton. WhatsApp was supposed to be run independently but we now know that Facebook is using a service that matches their user accounts with WhatsApp user profiles as revealed by the EU.
As a result of the deal, Jan Koum has a seat on the board with a salary that matches Zuckerberg’s. WhatsApp had an annual revenue of 20 million at the time of purchase leaving questions about what justifies the 19 billion price tag.
More sanctions for Facebook and WhatsApp
Just prior to the EU's decision to fine Facebook, the company was fined $167,000 by a French data watchdog for failure to protect its users' data from being used by advertisers. WhatsApp also got fined just a week ago by the Italian antitrust authorities for forcing users to share their personal data with Facebook. The fine was $3.34 Million
