Facebook has just been issued with a hefty €110 million (£95 million) fine by the European Commission, which acts as the European Union's competition watchdog.
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Why Facebook was just fined €110 million by the European Commission (FB)
The European Commission said Facebook provided misleading information over its $22 billion (£17 billion) purchase of Whatsapp in 2014.
Facebook CEO Mark Zuckerberg.
The Commission said Facebook provided misleading information over its $22 billion (£17 billion) purchase of WhatsApp in 2014.
At the time of the acquisition, the social media giant claimed that it could not automatically match user accounts on its platform and WhatsApp.
However, two years later, in August 2016, it launched a service that did exactly that — Facebook essentially updated its privacy policy to allow linking between WhatsApp users' phone numbers and Facebook users' identities.
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The Commission claims that the "technical possibility" of matching user accounts existed back in 2014 and that Facebook staff knew this but decided not to mention it. Why? Possibly because the company knew that competition regulators like the European Commission would kick up a fuss. Generally speaking, the Commission doesn't like it when one large company rules the roost — be it in terms of market share, data access, or user numbers. The organisation is also investigating Google for its search engine dominance and Apple for its tax affairs in Ireland.
"And it imposes a proportionate and deterrent fine on Facebook," she said. "The Commission must be able to take decisions about mergers' effects on competition in full knowledge of accurate facts."
The fine is the largest of its kind and one of the biggest penalties Facebook has ever faced. While it is unlikely to dent Facebook's coffers too much (the company has a market cap of $130 billion), it is still significant and a sign that Silicon Valley can't afford to take Vestager lightly.
Facebook said in a statement that the errors were not intentional.
"We've acted in good faith since our very first interactions with the Commission and we've sought to provide information at every turn," said a Facebook spokesperson. "The errors made in our 2014 filings were not intentional and the Commission has confirmed that they did not impact the outcome of the merger review. Today's announcement brings this matter to a close."
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