Nobody’s saying it’s a matter of “tit for tat” but it is a fact that as Deutsche Bank AG (NYSE:DBD) appears ready to agree to some sort of penalty by the U.S. Department of Justice, the European Union has accused Facebook Inc. (NASDAQ:FBC) of providing “incorrect or misleading information” to EU investigators probing the company’s takeover of WhatsApp in 2014.
The potential fine of up to 1% of Facebook’s worldwide revenue could be as much as $179 million based on Facebook’s revenue in 2015.
According to the EU, Facebook, which purchased WhatsApp for $22 billion, told the Commission that it was “unable to reliably match user accounts between Facebook and WhatsApp.” According to the EU that statement was misleading.
This became an issue in August when WhatsApp said it would share some users’ phone numbers with Facebook, something that triggered investigations by several EU data protection authorities leading to the recent charges.
Quoting from the EU charges: “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.”
A Facebook spokesman responded saying, “We’ve consistently provided accurate information about our technical capabilities and plans.” The spokesman added, “We respect the commission’s process and are confident that a full review of the facts will confirm Facebook has acted in good faith.”
According to Facebook the original statement it made was accurate and furthermore the company said it reached out to EU antitrust officials earlier this year to inform them that it had, “figured out a way to reliably match the users across the two services.”
The EU Launches Attacks
The potential Facebook fine is the latest in a series of charges against large U.S. tech companies by the European Commission, the EU’s enforcement arm. Other companies targeted include Apple Inc. (NASDAQ:AAPLC) for tax issues related to its presence in Ireland and Alphabet Inc. (NASDAQ:GOOGC) with regard to antitrust and privacy issues.
The Clock Is Ticking
Facebook has until Jan. 31 to respond to the charges. If the EU is able to confirm those charges, Facebook will owe that fine equal to 1% of worldwide revenue. Facebook could appeal the fine, which some companies have successfully done in the past.
In the meantime, Facebook has agreed to stop sharing WhatsApp users’ information with Facebook for the purposes of improving Facebook products and advertising experiences.