Mark Zuckerberg talks about WhatsApp at a 2015 developer conference in San Francisco.
Facebook received a $122 million fine on Thursday from the European Union’s antitrust regulators, who say the social media giant provided misleading information during its 2014 acquisition of the messenger app WhatsApp. According to regulators, Facebook claimed at the time to be unable to automatically link the accounts of both Facebook and WhatsApp users. By August 2016, however, WhatsApp announced that it would start sharing its data, including users’ phone numbers, with Facebook.
The European Commission, which manages the EU’s day-to-day operations, claims that Facebook staffers knew the company was capable of automatically matching users’ identities back in 2014. Facebook issued a statement on Thursday, insisting that the errors were “unintentional” and did not affect the outcome of the acquisition. “We’ve acted in good faith since our very first interactions with the Commission and we’ve sought to provide accurate information at every turn,” the company said, adding that “today’s announcement brings this matter to a close.”
While the fine has no impact on the merger between Facebook and WhatsApp, it establishes a firm precedent for future acquisitions. “Today’s decision sends a clear signal to companies that they must comply with all aspects of EU merger rules, including the obligation to provide correct information,” said Margrethe Vestager, the EU’s antitrust chief, in a statement on Wednesday. “The commission must be able to take decisions about mergers’ effects on competition in full knowledge of accurate facts.”
Although the EU is known for its strict data protection rules, their penalty for Facebook, as Reuters points out, could have been more severe. $122 million is a relatively small sum compared to the billions of dollars Facebook brings in every quarter. It’s also a small fraction of the $19 billion Facebook paid to acquire WhatsApp in 2014. According to Reuters, the European Commission had the authority to fine Facebook up to one percent of its turnover—around $276 million—but opted for a smaller fine due to the company’s cooperation and admission of error. Even so, $122 million is one of the largest regulatory penalties Facebook has ever had to pay to a government.
Just two days before the EU’s announcement, Facebook incurred a much smaller fine of around $164,000 from a French regulator. In this case, the company was accused of violating France’s data protection rules by compiling personal user data for targeted advertising, as well as collecting data on users’ browsing activity without their knowledge. On the same day, Dutch regulators also claimed that Facebook had broken their privacy rules, but did not levy a fine.
Despite enduring scrutiny from multiple European countries over the last week, Facebook is not a singular target. Other large companies in the U.S., including Amazon, Google, and Microsoft, have been subject to antitrust investigations from European regulators. Last Friday, an Italian antitrust agency also announced they were fining WhatsApp for $3.3 million for requiring users to share their personal information with Facebook.