Facebook accused of misleading EU regulators during $22 billion WhatsApp deal (FB)

Facebook has been hit with an antitrust complaint by the European Union over its acquisition of WhatsApp in 2014.

The social network is accused of misleading regulators during the deal, and could face fines of up to 1% of its annual sales.

The issue centres around the link between WhatsApp and Facebook accounts: In 2014, Facebook apparently told European regulators that it could not reliably link the accounts of users on the two services.

But then in September 2016, WhatsApp announced changes to its privacy policy that included “the possibility of linking WhatsApp user phone numbers with Facebook user identities,” the European Commission said in a statement published Tuesday.

As such, the Commission alleges Facebook misled it over its technical capabilities. Here’s what it says — emphasis ours:

“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. At this stage, the Commission therefore has concerns that Facebook intentionally, or negligently, submitted incorrect or misleading information to the Commission, in breach of its obligations under the EU Merger Regulation.”

Facebook insists that it acted in “good faith.”

Margrethe Vestager, the competition commissioner, said in a statement: “Companies are obliged to give the Commission accurate information during merger investigations. They must take this obligation seriously. Our timely and effective review of mergers depends on the accuracy of the information provided by the companies involved. In this specific case, the Commission’s preliminary view is that Facebook gave us incorrect or misleading information during the investigation into its acquisition of WhatsApp. Facebook now has the opportunity to respond.”

Facebook announced its intention to buy WhatsApp in February 2014, with the final price (including both cash and stock) coming in at $21.8 billion (£17.6 billion or €21 billion at current exchange rates).

In a statement, a Facebook spokesperson said — emphasis ours:

“We respect the Commission’s process and are confident that a full review of the facts will confirm Facebook has acted in good faith. 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. We’re pleased that the Commission stands by its clearance decision, and we will continue to cooperate and share information officials need to resolve their questions.”