Facebook Inc (NASDAQ:FB) Gets Punished By European Commission For Providing Misleading Information

Facebook Inc (NASDAQ:FB) Gets Punished By European Commission For Providing Misleading Information


Facebook Inc (NASDAQ:FB) has been punished by the European Commission for providing misleading information about its acquisition of WhatsApp in 2014.  The regulator has slapped a fine of Euro 110 million or $122 million on the social media firm. The incident happened when the regulator was examining the acquisition. It might not have been a surprise some sections since other American companies like Alphabet Inc (NASDAQ:GOOGL) or Microsoft Corporation (NASDAQ:MSFT) had to face the wrath of the European Commission in the past.

The regulator pointed out that Facebook indicated that it could not match user accounts automatically on its platform and WhatsApp. However, two years later the company did exactly, Reuters reported. Therefore, the anti-trust regulator found that the social media provided contractor statements during the merger review process in 2014. The regulator charged the Americam firm though the technical possibility of automatically matching users of Facebook and WhatsApp existed, it chose to feign ignorance before it. The commission felt that the staff was very well aware of the possibility.

Therefore, the regulator called its action as a proportionate and deterrent fine. However, Facebook was not ready to accept whatever the regulator found and that its errors made during the merger review process was not an intended one. The company pointed out that the Commission confirmed that its action would not have altered the outcome.

Facebook also opted to close the matter by saying that “today’s announcement brings this matter to a close.” The latest action of the regulator meant that there is no reversal of its decision to approve the acquisition of WhatsApp. Also, it would not have any impact on investigations in respect of data protection issues.

In a way, the Commission has let off Facebook lightly since it had the powers to slap a fine of a maximum of one percent of its turnover. That would have meant $276 million based on financial year 2016 results. The current fine meant about 55 percent lower than the possible fine. The fine amount could have been taken into consideration after the company acknowledged its infringement and cooperated with the process.

In pre-market on Thursday, the stock shed 0.59 percent.