– Following WhatsApp’s controversial initiative in August 2016 to change its terms and conditions to enable automatic linking of WhatsApp and Facebook accounts, the European Commission announced on 20 December 2016 that it is investigating whether Facebook submitted inaccurate information to its investigation into Facebook’s acquisition of WhatsApp.
One aspect that the Commission reviewed before clearing the acquisition was the possibility of automated matching between the two companies’ user accounts. Facebook stated in correspondence with the Commission that it would be unable to establish reliable automated matching. Given the subsequent launch of WhatsApp and Facebook account matching, the Commission thus believes that Facebook intentionally, or negligently, submitted incorrect or misleading information. Doing so is in breach of the EU Merger Regulation, and while it will not affect the Commission’s decision to clear the merger, it could lead to a fine of up to 1% of Facebook’s annual turnover.
Margrethe Vestager, the EU Competition Commissioner, clarified the importance for the Commission to be able to rely on the information submitted by companies being investigated: “Companies must take this obligation seriously. Our timely and effective review of mergers depends on the accuracy of the information provided by the companies involved.”
Facebook’s decision to automatically link WhatsApp and Facebook user accounts, unless users explicitly opt out, has been heavily criticised and held to be illegal in Germany where the Hamburg Commissioner for Data Protection and Freedom of Information, issued an administrative order on 27 September 2016 “that prohibits Facebook with immediate effect to collect and store data of German WhatsApp users”.
The Commission investigation highlights the increasing importance of big data in competition law contexts, and a convergence of data protection and competition law disciplines, albeit the commission clarified that the current investigation is unrelated to privacy and data protection issues.
Concerning the investigation, Ms. Vestager added, “in this specific case, the Commission’s preliminary view is that Facebook gave us incorrect or misleading information during the investigation into its acquisition of WhatsApp.”