Data Privacy

Facebook may have led WhatsApp merger investigation astray

Face­book is be­ing probed by the Eu­ro­pean Com­mis­sion for sub­mit­ting false in­for­ma­tion in the What­sApp merger in­ves­ti­ga­tion. The probe is fo­cused on Face­book’s claim that it would be im­pos­si­ble to au­to­mat­i­cally link Face­book and What­sApp ac­counts.

– 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.”

EU-U.S. Privacy Shield maintains legal limbo for transatlantic data transfers

A new deal for EU-U.S. per­sonal data trans­fers was rushed through af­ter the Eu­ro­pean Court of Jus­tice in­val­i­dated the pre­vi­ous Safe Har­bor agree­ment. It is how­ever still doubt­ful whether the new frame­work meets EU data pro­tec­tion re­quire­ments.

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