Facebook Inc. was fined 110 million euros ($122 million) by the European Union for misleading regulators during a 2014 review of the WhatsApp messaging service takeover on the same day the EU threatened to heavily penalize Patrick Drahi’s Altice NV for implementing for a second time a deal before getting regulatory clearance.
The European Commission won’t overturn approval for the $22 billion WhatsApp purchase as “the incorrect or misleading information provided by Facebook did not have an impact on the outcome of the clearance decision,” the regulator said on Thursday in an emailed statement.
The Facebook fine “sends a clear signal to companies that they must comply with all aspects of EU merger rules, including the obligation to provide correct information,” EU Competition Commissioner Margrethe Vestager said. She added in a Bucharest speech that Facebook’s cooperation with EU officials earned it a lower fine.
Altice, which was already fined 80 million euros last year in France for jumping the gun in its takeover of French phone carrier SFR Group SA, was sent a statement of objections by the EU accusing it of similar misdeeds in relation to the acquisition of telecommunication operator PT Portugal.
The commission suspects Altice may have even implemented the merger prior to its notification to the EU in some instances. Drahi’s company risks a fine of as much as 10 percent of Altice’s annual worldwide sales but the EU’s conditional clearance of the PT Portugal deal in 2015 won’t be affected.
The commission said it considers that the purchase agreement between the two companies put Altice in a position to exercise decisive influence over PT Portugal before notification or clearance of the transaction, and that in certain instances Altice actually exercised decisive influence over PT Portugal. Altice doesn’t agree with the commission’s preliminary conclusions and will submit a full response to the EU, the company said in statement.
The fine from Europe’s powerful antitrust authority caps months of probes from privacy regulators over the WhatsApp data move. Facebook agreed to suspend using data from British users of WhatsApp last year amid UK scrutiny. EU data protection regulators also said Facebook must stop processing user data while they investigate the privacy changes. The US Federal Trade Commission also got a complaint from privacy groups claiming Facebook’s move violates US law on unfair and deceptive practices.
Facebook said the firm “acted in good faith” in its interactions with the commission. “The errors we made in our 2014 filings were not intentional and the commission has confirmed that they did not impact the outcome of the merger review,” a Facebook spokesman said. “Today’s announcement brings this matter to a close.”
The social network company said it wouldn’t appeal the EU decision. The commission’s decision “signals that it means business when it comes to enforcing the merging parties’ obligation to provide accurate information,” said Nelson Jung, an antitrust lawyer at Clifford Chance. “This substantial fine materially exceeds any fine the commission has previously imposed where companies have failed to notify a merger.”
Given the commission didn’t review its merger approval decision “it is not clear whether there could have been anti-competitive aspects to the merger which may be harming consumers,” said Jung. European consumer group BEUC on Thursday said “it is crucial” that competition authorities look more closely into the possible harm a merger of data-heavy companies could cause.
“It is unacceptable that consumers are continuously exposed to the misuse of their data by Facebook,” said Monique Goyens, the group’s director general. “It is very disappointing that the commission decided not to revise its original decision on the Facebook merger with WhatsApp.”