Close to two years ago, tech entertainment giant Facebook signed a sweeping $19 billion deal to acquire the messaging platform WhatsApp. This type of acquisition typically requires clearance from not only American authorities but also from those in countries where the companies in question hold a significant presence. Although Facebook complied with these requirements, just as Microsoft did with its recent LinkedIn acquisition, it appears as though the European Union’s competition regulator isn’t entirely satisfied with the information Facebook submitted to obtain approval for the deal.
According to EU regulators, they were misled by Facebook’s claims that it would be unable to link user profiles across the two platforms. While this potential misrepresentation is improbable to reverse the 2014 acquisition of WhatsApp, it could well lead to Facebook incurring a steep fine, up to 1 percent of its total revenue. This comes on the heels of a recent revelation by WhatsApp that it would begin sharing its tremendous 1 billion user data with parent company Facebook, a decision that has met with staunch resistance from both individual users and governments, especially in Europe.
What really crosses the line, it seems, is that Facebook had allegedly informed European regulators that it didn’t possess the technical ability to do what it’s currently undertaking. Quite frankly, given the technical prowess of a company like Facebook, it appears almost inconceivable that regulators swallowed these claims without question. After all, when a juggernaut like Facebook purchases a company the size of WhatsApp, it logically gains access to a massive new database of potential advertisement targets.
Having discovered this likely ruse, EU’s competition regulator is sounding the alarm, asserting that it was duped by Facebook. “The commission’s preliminary view is that Facebook gave us incorrect or misleading information during the investigation into its acquisition of WhatsApp,” stated competition commissioner Margrethe Vestager. The EU has since confronted Facebook with its objections in a public statement.
Faced with these allegations, Facebook retaliated by releasing a statement asserting that they have “consistently provided accurate information about our technical capabilities and plans, including in submissions about the WhatsApp acquisition and in voluntary briefings before WhatsApp’s privacy policy update this year.”
Facebook has until the 31st January 2017 to submit an official reply to the EU’s grievances. The tech industry and its spectators are keenly awaiting the company’s reaction to these accusations, as the outcome could potentially have a significant impact on future big tech acquisitions.
Stay tuned for the latest updates on this breaking story. In the meantime, visit our related article that breaks down the details of WhatsApp and Facebook’s controversial data-sharing collaboration.
Paul Balo is the founder of TechBooky and a highly skilled wireless communications professional with a strong background in cloud computing, offering extensive experience in designing, implementing, and managing wireless communication systems.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.
