A Look Back On A Decision Imposing A Fine On Facebook For Having Provided The European Commission With Inaccurate Information On Its Acquisition Of Whatsapp

Author:Ms Emmanuelle van den Broucke
Profession:Dentons
 
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On May 18, 2017, the European Commission imposed a €110 million fine on Facebook for having provided inaccurate information when it acquired WhatsApp, both with regard to the notification form (Form CO) and in response to a request for information concerning the possibility of automatic correspondence between Facebook and WhatsApp user accounts.

It appears from the infringement decision published on July 26, 2017 that, when it was questioned by the Commission during the pre-notification procedure, Facebook explicitly stated it had neither the technical capacity to carry out such an automatic correspondence nor the desire to do so. Furthermore, following the receipt of a document from a third party which attested to the contrary, the Commission sent Facebook a request for information to which the latter reiterated its response.

Yet on August 26, 2016, WhatsApp announced a change in its Terms and Conditions and Private Policy, enabling the correspondence between its user data and Facebook profiles.

Additionally, the Commission noted during its subsequent investigation that, during the examination of the merger, Facebook had already examined the possibility of implementing an automatic correspondence of user profiles between two different applications, and its personnel was aware of this possibility.

This decision is interesting for several reasons.

Firstly, it sets an example: this sanction decision for inaccurate information, the first under Regulation No. 139/2004, appears to announce an increasingly strict policy with regard to companies that notify their mergers by presenting an incomplete or inaccurate file. Incomplete and inaccurate information can indeed distort the Commission's analysis concerning the effects of the operation examined on the relevant markets, while the Commission is forced to give its authorizing decision within strict deadlines.

The second interesting element of this decision resides in its amount: while the Commission did not impose in the case at hand the maximum penalty allowed by Article 14 of the Regulation (the financial penalty being a fine that can reach up to 1% of the global turnover of the year preceding the violation, Facebook registered a turnover of €28 billion in 2016), it did however set an amount that may appear deterrent for companies. Although the Commission took into account mitigating circumstances to reduce its fine, as Facebook did not contest the violation or cooperate with the Commission during this...

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