The European Union antitrust regulators have said that Facebook provided misleading information during its takeover of WhatsApp in 2014, although these objections will not impact the approval of the $22 billion merger. The social network however could face a fine of 1% of its turnover.
All the controversy started in August when WhatsApp announced some changes in its privacy policy and that it is going to share phone numbers of some users with Facebook. The announcement resulted in several EU data protection authorities starting investigation of the matter.
According to the EU Commission, at the time of acquisition, Facebook had said in its notification that it would be unable to match the user accounts of two companies.
“In today’s Statement of Objections, the Commission takes 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,” it said.
“At this stage, the Commission, therefore, has concerns that Facebook intentionally, or negligently, submitted incorrect or misleading information to the Commission, in breach of its obligations under the EU Merger Regulation.”
Facebook has over one month time until January 31 to respond. It could face a fine of up to 1% of its turnover if the Commission’s finds that its concerns were true.
Facebook, headquartered in Menlo Park, California, U.S., is the largest social networking website in the world. The Facebook website was launched in 2004 by Mark Zuckerberg, along with fellow Harvard College students Andrew McCollum, Eduardo Saverin, Chris Hughes, and Dustin Moskovitz. Initially, the websites membership was limited to Harvard students, but it was later expanded to include higher education institutions in the Boston area, the Ivy League schools, and Stanford University. Since 2006, anyone aged 13 or above can register on the website.
By late 2007, there were 100,000 business pages on Facebook. These pages were created by companies to promote themselves and attract customers. On October 24, 2007, Microsoft revealed to have purchased a 1.6% share of Facebook for $240 million. Once year later, Facebook announced its plan to set up its international headquarters in Dublin, Ireland.
In July 2010, the company announced to have touched the milestone of 500 million users, making it the world’s largest online social network at the time. At that time, almost half of the Facebook users were using the site daily, for an average of 34 minutes (according to the company’s data).
According to SecondMarket Inc., Facebook’s value in November 2010 was $41 billion, making it the third largest American web company after Google and Amazon.
The initial public offering of Facebook was held in February 2012. Three months later, the company started selling stock to the public, and reached an original peak market capitalization of $104 billion. As of March 31, 2016, the social network had over 1.65 billion monthly active users, and it is now also the world’s most popular social networking site based on the number of active user accounts.
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