The EU Commission has given Facebook a substantial fine after the social network gave them misleading and incorrect information regarding their actions in the WhatsApp takeover.
In 2014, two social media giants collided after Facebook purchased WhatsApp, a messaging service.
At the time of the purchase, Facebook made it clear to the European Commission that they did not have the knowledge or ability to link the two platforms and allow users to match their profiles.
This ability to link to the two platforms may have had Competition Law implications as it may have given Facebook an unfair advantage and a majority in the social media sector.
These Competition Law implications can be substantial, which is why during mergers or takeovers between businesses, the Commission will investigate thoroughly what the possible effects to the market will be. Any attempt to distort their investigation can have disastrous consequences including substantial fines and a possible rejection of the takeover therefore forcing the companies to reverse all action taken to complete the purchase. Â
Facebook have been on the receiving end of these consequences. After stating they did not have the ability to match users accounts on both platforms in 2014, 2016 saw the launch of just that, the function for an automatic match of both the userÂs profiles.
While Facebook argued that their mistakes were not intentional, the Commission found that Facebook staff were aware of the possibility of the matching software at the time in which the company stated it did not have the ability to do it.
The result and sanction for Facebook was a Â£95 million fine, payable as 110 million Euros.
While this may seem a monumental amount, the Commission could have fined the social media giant up to 1% of its turnover, which would have been at least double the fine imposed.
EU Competition Commissioner Margrethe Vestager said: “Today’s decision sends a clear signal to companies that they must comply with all aspects of EU merger rules, including the obligation to provide correct information. And it imposes a proportionate and deterrent fine on FacebookÂ.
In some good news for Facebook, the purchase has been cleared by the Commission therefore there should be no future issues with their WhatsApp takeover.
Leaving the last word for Facebook, in their statement they said “We’ve acted in good faith since our very first interactions with the Commission and we’ve sought to provide accurate information at every turn.Â
“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. Today’s announcement brings this matter to a close.”
Competition law seems to slip under the radar for many businesses as they believe it is only a concern of huge corporations, however it has the possibility to affect everyone.
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