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1st Ld Writethru: Facebook provided misleading information about WhatsApp takeover: EU regulators

Xinhua, December 21, 2016 Adjust font size:

Facebook misled the European Union (EU) regulators over its 2014 takeover of WhatsApp, the EU said Tuesday.

"The European Commission has sent a statement of objections to Facebook alleging the company provided incorrect or misleading information during the Commission's 2014 investigation under the EU merger regulation of Facebook's planned acquisition of WhatsApp," said the European Commission, the EU's executive body, in a statement.

According to the statement, Facebook now has now until Jan. 31, 2017 to respond to the statement of objections. If the Commission's preliminary concerns in this case is confirmed, the Commission could impose a fine of up to 1 percent of Facebook's turnover.

The acquisition announced in February 2014 gained EU approval in October the same year.

When reviewing Facebook's planned acquisition of WhatsApp, the Commission looked, among other elements, at the possibility of Facebook matching its users' accounts with WhatsApp users' accounts.

In its notification of the transaction in August 2014 and in a reply to a request of information, Facebook indicated to the Commission that it would be unable to establish reliable automated matching between the two companies' user accounts.

However, in August 2016, WhatsApp announced, among other updates to its terms of service and privacy policy, the possibility of linking WhatsApp user phone numbers with Facebook user identities.

WhatsApp explained that this was done with a view to improving the service by, for example, allowing Facebook to offer better friend suggestions or displaying more relevant ads on WhatsApp users' Facebook accounts.

In Tuesday's statement of objections, the Commission took 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.

The Commission said the current investigation is limited to the assessment of breaches of procedural rules.

As the Commission's October 2014 decision to clear Facebook/WhatsApp was based on a variety of factors going beyond the possibility of matching user accounts, the current investigation will not have an impact on that decision which remains effective, the Commission added. Endit