15 ms·

Facebook fined €110M for providing misleading information on WhatsApp takeover

296 points by antr 9y ago

deleted 9y ago
[deleted]
thr0waway1239 9y ago
>> According to the Merger Regulation, the Commission can impose fines of up to 1% of the aggregated turnover of companies, which intentionally or negligently provide incorrect or misleading information to the Commission. Anyone read this and imagined the Facebook lawyers saw this clause, and said to Mark "Yes, the ROI on providing misleading information is completely in Facebook's favor"
- kome 9y ago
  True. Too little, too late.
- rjsw 9y ago
  There is also a new law that allows fines for capturing information on non-users, the fines for this can be 4% of turnover.
  - tomp 9y ago
    Anything that is belov 50% of the turnover is a joke, especially for new-age internet companies.
    - thr0waway1239 9y ago
      The saying usually goes that laws should be designed to a) disincentivize and b) not set bad precedents. This law fails on both counts. No investor/shareholder will actually worry about this paltry fine. All other companies will take notice and decide that the penalty cost of infraction is much smaller than the opportunity cost of expansion. This is the kind of precedent that emboldens companies to do as they please. Of course, all this assumes that governments and top tech companies don't have some mutual back scratching agreements going on.
- feintruled 9y ago
  Makes me wonder if this sort of thing isn't a more civilised version of the bribe. "Tell us what we need to hear to drive this through and we'll fine you later." The beauty of the system being that no-one ever needs to explicitly offer or ask for money.
  - bryanrasmussen 9y ago
    the more civilized version of the bribe then also goes to the government as a whole instead of into the pockets of officials
    - lotsofpulp 9y ago
      The more civilized version of the bribe also gets officials a nice job with the bribe payer.
      - bryanrasmussen 9y ago
        not sure how much the revolving door revolves in the EU.
- 0verc00ked 9y ago
  Can only speculate, but that doesn't sound out of the realm of possibility. The possible gains due to all the loopholes are a big part of the problem. Seems that businesses like Facebook are incentivized to do the wrong thing. But they also have to face the backlash of their actions. Though this sanction is barely going to deter any business from lying again, maybe public perception will.
awjr 9y ago
The EC asked FB if it was possible to link accounts from Whatsapp to FB in 2014. They said no, knowing full well that the answer was yes. The EC did the merger evaluation with the assumption that they could. In 2016 FB announced they were linking accounts in a ToS update. It is not that they could or could not do it, but that they knew they could, but chose to hide that fact.
- mtgx 9y ago
  I've lost track of how many times Facebook has done this, including all those times it was resetting people's privacy settings to being more public.
  - loceng 9y ago
    I keep wondering how Mark justifies this to himself.
    - AlexandrB 9y ago
      If he's a capitalist: $$$ If he's a true believer: "connecting people".
    - r00fus 9y ago
      Probably along the lines of "I'm Mark, why do I have to justify myself?"
      - treebeard901 9y ago
        I'm not sure justification has ever really been a problem for him. I assume this is a real quote from the early years: Zuck: Yeah so if you ever need info about anyone at Harvard Zuck: Just ask Zuck: I have over 4,000 emails, pictures, addresses, SNS [Redacted Friend's Name]: What? How'd you manage that one? Zuck: People just submitted it. Zuck: I don't know why. Zuck: They "trust me" Zuck: Dumb fucks
        9y ago
foota 9y ago
I'm not sure I agree with this ruling. The question as stated is whether fb would be "unable to establish reliable automated matching between Facebook users' accounts and WhatsApp users' accounts" and it seems to me that matching based on entered phone numbers isn't really automatic - since it's only possible for those that enter their number, and is a manually commenced process.
- CaptainZapp 9y ago
  I don't think that the European Comission deals in hair splitting and semantics. Facebook lied, twice! And now they reap the consequences.
- iicc 9y ago
  Facebook aren't matching phone numbers, they're overlaying social graphs. They know who you are based on who else's phone book/friends list you show up in. WhatsApp uploads the whole phone book - it doesn't matter if the numbers correspond to WhatsApp users or not.
p49k 9y ago
In other words, less than 0.7% of the amount Facebook paid for WhatsApp.
- a_imho 9y ago
  rounding error
- wellboy 9y ago
  It's a bit more, since most of the $19B ($15b afaik) was FB stock. So $110M might be more like 3.5% instead of 3.5% or 10% of their yearly profit. Still not that much, but also not nothing.
  - deleted 9y ago
    [deleted]
flexie 9y ago
Please, start regulating and taxing these multinational advertising companies much more aggressively. Once advertising companies like Facebook or Google reach a certain size, they should be required to pay taxes where the ads are shown to users. Make a set of basic EU user terms and privacy policy for advertising companies masked as social networks, search engines, email providers etc, some of it mandatory, some of it that they can opt out off. But advertising companies above a certain size shouldn't be allowed to set their own (American) terms. And please, split up these behemoths. It's not good for anyone that one search engine and one social network rules it all. They have EU-wide market shares above 90 percent. We would never allow that in industries as automobiles or television. We would never allow it for newspapers or tv stations. Somehow, we allow it for social networks and search engines.
- ae64 9y ago
  At what cost? Would displaying significantly more ads to EU users to offset the regional tax hikes be worth the revenue raised?
  - arximboldi 9y ago
    Regardless of the taxing system, Facebook would already show you as many ads as possible. It makes no sense to me that they would show more ads in EU in that case, because that means that they could also increase the number of ads shown in the US and increase their profit. If anything, it would just cut their surplus.
    - ae64 9y ago
      I don't believe that's entirely true, Facebook has endless channels (e.g. messenger) in which they could introduce or increase their advertising frequency (think Forbes). They could even disclose to end-users that these additional advertisements were being served specifically as they are within the EU, similar to the ubiquitous cookie pop-ups they are already well adjusted to seeing.
      - 9y ago
interfixus 9y ago
I don't get it. How could anyone be deceived? How could anyone imagine that anyone could be deceived? How could anyone assume - how could it technically be the case - that data from one system should not be mergeable with data from another?
- techstrategist 9y ago
  The deception does not have to be believed to be a deception. Facebook explicitly lied to the EC: "When Facebook notified the acquisition of WhatsApp in 2014, it informed the Commission that it would be unable to establish reliable automated matching between Facebook users' accounts and WhatsApp users' accounts." "The Commission has found that, contrary to Facebook's statements in the 2014 merger review process, the technical possibility of automatically matching Facebook and WhatsApp users' identities already existed in 2014, and that Facebook staff were aware of such a possibility."
  - Markoff 9y ago
    why did they approve it after finding they are already lying?
jakozaur 9y ago
Given that FB paid $19 Bln for WhatsApp, €110m seems to be a cost of doing business for Facebook. That may be calculated play. USA got very liberal antitrust policy, allowing massive M&A. Good for shareholders, bad for everybody else. E.g. the biggest four airlines in USA got over 80% market share. In Europe they just have 48%. That's why United can re-accommodate passenger and get away with it: http://www.economist.com/news/leaders/21721201-americans-are-treated-abysmally-their-airlines-they-should-look-europe-lessons-lack http://www.economist.com/news/leaders/21721201-americans-are...
- denzil_correa 9y ago
  > Given that FB paid $19 Bln for WhatsApp, €110m seems to be a cost of doing business for Facebook According to Facebook Q1 2017 results, it had ~7.2 Billion EUR revenue and 2.7 Billion EUR as net income. https://s21.q4cdn.com/399680738/files/doc_financials/2017/Facebook-Reports-First-Quarter-2017-Results.pdf https://s21.q4cdn.com/399680738/files/doc_financials/2017/Fa...
- antr 9y ago
  The fine is not due to any antitrust laws being breached, but because FB mislead authorities by providing incorrect information. > Indeed, the clearance decision was based on a number of elements going beyond automated user matching.
- blowski 9y ago
  I thought the same thing. It's like having to pay £1 extra on a £200 purchase - sure, just it add it to the bill.
  - Bartweiss 9y ago
    I wonder if we could kill the secrecy by just doing this upfront? "Sure, you can have your acquisition. Here's a price sheet for the changes you've requested." Less hide and seek or regulatory expense, you can assess much larger penalties for dishonesty than for up-front admissions, and you can point the fees to something pro-social and help mollify people about Facebook's low tax rate.
nomercy400 9y ago
You should see it like this: 110 million euros to buy the permission to acquire all the data of all european WhatsApp users. Is this just the fine for lying? Or is this also the fine for combining personal information about european citizens? If only the fine for lying, then what the EU should do next is investigate the privacy concern. And possibly another fine could be the result of that.
- kbart 9y ago
  Yes, I was shocked that earlier conclusion was left standing. That's like being caught robbing a bank, but let to keep the stolen bags of money and just ordered to pay a parking ticket for a getaway car waiting outside on a sidewalk. That's a very bad precedence and message to future deals, that it's OK to ignore EU laws if you are ready to pay small (comparatively) amount of money for it.
  - riffraff 9y ago
    the merger was approved accounting for user matching ("'even if' assessment that assumed user matching as a possibility"). Knowing this in advance would have not changed the approval from the commission, your comparison is wrong, and it would set a bad precedent only for people who didn't actually read the case.
easilyBored 9y ago
Facebook fined €110M for providing misleading information on WhatsApp takeover Should be fine plus undoing what they did. or spin Whatsapp...go back to square one.
timow1337 9y ago
I'm in favor of the ruling but I don't understand why the European commission has any authority over two american companies merging?
- adamnemecek 9y ago
  Because they are doing business in said counties.
- brute 9y ago
  Maybe it is because of Facebook Ireland Limited, which technically is the company everyone outside of USA and Canada does business with
- Markoff 9y ago
  because if you wanna do business in some country you have to comply with local law even if it's internet company
- deleted 9y ago
  [deleted]
0verc00ked 9y ago
Well of course they were aware. And the Commission should have been aware. Here's a quote that stuck out to me: “Consumer communications services: the Commission found that Facebook Messenger and WhatsApp were not close competitors and that consumers would continue to have a wide choice of alternative consumer communications apps post-merger” The first part doesn’t sound right. If WhatsApp and Facebook Messenger aren’t close competitors, I need to figure out what a competitor is. Hmmm.. http://www.businessdictionary.com/definition/competitor.html http://www.businessdictionary.com/definition/competitor.html I suppose it's because they are not rivals? They were pre acquisition. Because they definitely operate in a similar industry with a similar product/service. It’s true that consumers can choose to use alternatives.
- sleepychu 9y ago
  I use both, a lot of people I know use both. I think they fulfil different markets.
- wayn3 9y ago
  They are concerned about actual monopolies. There are hundreds of messenger apps out there that roughly work the same way. If facebook suddenly charged $100/day for whatsapp, people would just use something different. Like Kik or whatever. Its true that those competitors dont really have market share. But thats not the point. They exist and are readily accessible. If facebook wants to shoot itself in the foot in trying to force its customers to use their competitors, thats just healthy competition. Therefore, there's no real threat of a monopoly here. Facebook bought a network effect, not a monopoly. Compare that to something like mobile carriers. If At&t buys verizon and spring or whatever they're called, there ARE no other options. Antitrust laws are mostly about keeping market mechanics in tact. Facebook and Google cant really force anyone to use their products. If their products are too expensive, there are lots of competitors. That's why they want to get rid of net neutrality. Making it expensive to run competing services strengthens their position.
SkeptinenSpede2 9y ago
Facebook is known by lies and privacy violations, is this even news worthy ?
mike-cardwell 9y ago
Why a fine? Why aren't they being banned from operating WhatsApp in the EU? And being forced to delete any data connecting the accounts to Facebook accounts if they want to continue operating Facebook within the EU?
- cbg0 9y ago
  Because they can only fine the company, according to the regulation http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32004R0139 http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:320...
- Markoff 9y ago
  can't imagine what would ban of Facebook messenger and whatsapp do for european IM market, sadly it ain't gonna happen but people in Signal and Threema would be celebrating for months
torrent-of-ions 9y ago
"Today's decision sends a clear signal to companies that they must comply with all aspects of EU merger rules..." More like: "Today's decisions sends a clear signal that it costs €110M to escape EU merger rules."
stefek99 9y ago
What would happen if they told the truth? Why investigating after the fact, not during the M&A?
- mtgx 9y ago
  Because like many other people, the EC made the mistake of trusting Facebook on its word. Don't do that. Ever.
- wayn3 9y ago
  Because the european commission likely has no executive antitrust agency that would be capable of overseeing this.
MiddleEndian 9y ago
Fines like this are mostly pointless, a cost of doing business. If governments want to stop being defrauded by corporations, they need to respond with criminal penalties like imprisonment, the same as they would to a regular citizen.
- utternerd 9y ago
  We throw people in jail far too often as it is, and you want to add to the prison population for something that didn't harm anyone? I honestly don't follow. If this were executives covering up the harmful effects of their product on humans, I'd agree. The Government makes the vast majority of their money off corporate profits, so they have a vested interest in seeing them succeed.
  - MiddleEndian 9y ago
    I do agree that we throw people in jail too often, but if we're going to let corporations straight up lie for a low price, what we're charging is a usage fee, not a penalty.
ykler 9y ago
It is obvious that it would be possible to match accounts in a great many cases, and if the commission wanted to know more precisely how good the matchings could be, it seems like it would make more sense for them to ask Facebook and WhatsApp for social graph data and hire their own scientists to investigate that than to trust Facebook's answers on such a subjective point. But really it seems like they must have basically just been OK with Facebook monopolizing messaging because it was obviously pretty terrible for competition to allow this merger even assuming they thought the users of Facebook and WhatsApp wouldn't be able to be merged very well. However, I would be really curious to hear from someone who knows something about their actual thinking and motivations (and I guess what the law says since they may be quite constrained by that).
RodericDay 9y ago
> I used to be as against ads as you are, and then I tried to start a business > Overall, I'm in mild agreement that society would be better if it weren't ad-driven, but that's a utopian ideal Sounds like the typical conservative spiel. "I used to be idealist like you once, but then I realized how the world really works and sold out". There's a short mini-doc freely available out there, made by an heir of the Johnson & Johnson family, about the 1%. He was inspired to do this partly because his father had, in his day, gone out of his way and caused trouble by participating in some controversial (at the time) anti-apartheid demonstrations. However, he was now berating his son for his "idealism" in discussing the issue of inequality, coming off as insanely hypocritical in the process. It's a really poor way of arguing a point, imo.
- dahart 9y ago
  > Sounds like the typical conservative spiel. That's hilarious; most people who know me consider me a socialist. > There's a short mini-doc I've seen it, and it's fantastic. It's not about advertising. > It's a really poor way of arguing a point, imo. That's hilarious coming on the heels of an ad-hominem. Do you have any counter argument? Poor as it is, it's true, I'm sharing my feelings as someone with experience on both sides. The person I replied to, and you, and me, we all have the power within us to make ads irrelevant to our lives. And yet we don't. Why? The person I replied to seems to suggest he has an inalienable right to consume free content. Is that true? Does he deserve high quality free content, ad-free? Is it really the advertisers' fault that ads exist? Do you believe that taxing advertisers is the solution to reducing the scourge of ads? Anyway, I've upvoted you for making me laugh.
  - RodericDay 9y ago
    First, you sound like an american, so being called "socialist" doesn't really mean anything. Center-right, Center, and center-left politicians are routinely called "socialist" in the US. Additionally, it's not an ad-hominem when I'm criticizing the form your appeal is taking. "I'm being ad-hommed!" is another telltale sign of someone who thinks they're better at rhetoric than they actually are. As for the matter in question, many of us do use advertisement blockers, and when the content is truly paywalled, we engage in required transactions to obtain access to it. It's risible that you consider yourself a socialist when you unironically spin the peddling of addictive clickbait garbage as "consuming free high-quality content". As bizarre a way to describe Facebook or Buzzfeed as I've ever witnessed. Taxing ads, and outright banning them from targeting anyone but adults, seem like nice first steps.
welpwelp 9y ago
Who's profiting from these 110M? :3
baahh3333 9y ago
110 million is nothing for Facebook in comparison with the treasure trove of data and user identities they have conveniently "acquired" from all the countries which are using Whatsapp.
sambe 9y ago
Bit off-topic, but the end of the article lists the three reasons the original deal was cleared. They seem naive to the point of absurdity: Facebook Messenger and WhatsApp were "distant competitors"? They are number one and two messaging apps in my circle of friends and acquaintances.
hobarrera 9y ago
Gee, it was stupidly obvious that Facebook could automate crossing information: * It constantly prompts people for their phone numbers (and most people provide it). * For new accounts, is REQUIRES a phone number. Whatsapp accounts are based on phone numbers. Isn't it quite obvious how easy it is to cross accounts? Do I REALLY need to spell this out further?
- Markoff 9y ago
  you can have dual SIM phone
  - hobarrera 9y ago
    Facebook affirmed they could not cross information between their users and whatsapp users. Dual SIMs are irrelevant to this, a very very small minority of the users will be providing using this feature to have separate numbers of facebook and whatsapp.
- riffraff 9y ago
  it was, which is why the commission accounted for it when approving the merger. The fine is only because they lied about it.
sandov 9y ago
I Guess it's time for people to switch to a better IM platform. I'm tired of having to use WhatsApp because everyone else does.

296 points by antr 9y ago

deleted 9y ago

[deleted]

>> According to the Merger Regulation, the Commission can impose fines of up to 1% of the aggregated turnover of companies, which intentionally or negligently provide incorrect or misleading information to the Commission. Anyone read this and imagined the Facebook lawyers saw this clause, and said to Mark "Yes, the ROI on providing misleading information is completely in Facebook's favor"

kome 9y ago
True. Too little, too late.
rjsw 9y ago
There is also a new law that allows fines for capturing information on non-users, the fines for this can be 4% of turnover.
- tomp 9y ago
  Anything that is belov 50% of the turnover is a joke, especially for new-age internet companies.
  - thr0waway1239 9y ago
    The saying usually goes that laws should be designed to a) disincentivize and b) not set bad precedents. This law fails on both counts. No investor/shareholder will actually worry about this paltry fine. All other companies will take notice and decide that the penalty cost of infraction is much smaller than the opportunity cost of expansion. This is the kind of precedent that emboldens companies to do as they please. Of course, all this assumes that governments and top tech companies don't have some mutual back scratching agreements going on.
feintruled 9y ago
Makes me wonder if this sort of thing isn't a more civilised version of the bribe. "Tell us what we need to hear to drive this through and we'll fine you later." The beauty of the system being that no-one ever needs to explicitly offer or ask for money.
- bryanrasmussen 9y ago
  the more civilized version of the bribe then also goes to the government as a whole instead of into the pockets of officials
  - lotsofpulp 9y ago
    The more civilized version of the bribe also gets officials a nice job with the bribe payer.
    - bryanrasmussen 9y ago
      not sure how much the revolving door revolves in the EU.
0verc00ked 9y ago
Can only speculate, but that doesn't sound out of the realm of possibility. The possible gains due to all the loopholes are a big part of the problem. Seems that businesses like Facebook are incentivized to do the wrong thing. But they also have to face the backlash of their actions. Though this sanction is barely going to deter any business from lying again, maybe public perception will.

awjr 9y ago

The EC asked FB if it was possible to link accounts from Whatsapp to FB in 2014. They said no, knowing full well that the answer was yes. The EC did the merger evaluation with the assumption that they could. In 2016 FB announced they were linking accounts in a ToS update. It is not that they could or could not do it, but that they knew they could, but chose to hide that fact.

mtgx 9y ago
I've lost track of how many times Facebook has done this, including all those times it was resetting people's privacy settings to being more public.
- loceng 9y ago
  I keep wondering how Mark justifies this to himself.
  - AlexandrB 9y ago
    If he's a capitalist: $$$ If he's a true believer: "connecting people".
  - r00fus 9y ago
    Probably along the lines of "I'm Mark, why do I have to justify myself?"
    - treebeard901 9y ago
      I'm not sure justification has ever really been a problem for him. I assume this is a real quote from the early years: Zuck: Yeah so if you ever need info about anyone at Harvard Zuck: Just ask Zuck: I have over 4,000 emails, pictures, addresses, SNS [Redacted Friend's Name]: What? How'd you manage that one? Zuck: People just submitted it. Zuck: I don't know why. Zuck: They "trust me" Zuck: Dumb fucks
      - 9y ago

foota 9y ago

I'm not sure I agree with this ruling. The question as stated is whether fb would be "unable to establish reliable automated matching between Facebook users' accounts and WhatsApp users' accounts" and it seems to me that matching based on entered phone numbers isn't really automatic - since it's only possible for those that enter their number, and is a manually commenced process.

CaptainZapp 9y ago
I don't think that the European Comission deals in hair splitting and semantics. Facebook lied, twice! And now they reap the consequences.
iicc 9y ago
Facebook aren't matching phone numbers, they're overlaying social graphs. They know who you are based on who else's phone book/friends list you show up in. WhatsApp uploads the whole phone book - it doesn't matter if the numbers correspond to WhatsApp users or not.

p49k 9y ago

In other words, less than 0.7% of the amount Facebook paid for WhatsApp.

a_imho 9y ago
rounding error
wellboy 9y ago
It's a bit more, since most of the $19B ($15b afaik) was FB stock. So $110M might be more like 3.5% instead of 3.5% or 10% of their yearly profit. Still not that much, but also not nothing.
- deleted 9y ago
  [deleted]

flexie 9y ago

Please, start regulating and taxing these multinational advertising companies much more aggressively. Once advertising companies like Facebook or Google reach a certain size, they should be required to pay taxes where the ads are shown to users. Make a set of basic EU user terms and privacy policy for advertising companies masked as social networks, search engines, email providers etc, some of it mandatory, some of it that they can opt out off. But advertising companies above a certain size shouldn't be allowed to set their own (American) terms. And please, split up these behemoths. It's not good for anyone that one search engine and one social network rules it all. They have EU-wide market shares above 90 percent. We would never allow that in industries as automobiles or television. We would never allow it for newspapers or tv stations. Somehow, we allow it for social networks and search engines.

ae64 9y ago
At what cost? Would displaying significantly more ads to EU users to offset the regional tax hikes be worth the revenue raised?
- arximboldi 9y ago
  Regardless of the taxing system, Facebook would already show you as many ads as possible. It makes no sense to me that they would show more ads in EU in that case, because that means that they could also increase the number of ads shown in the US and increase their profit. If anything, it would just cut their surplus.
  - ae64 9y ago
    I don't believe that's entirely true, Facebook has endless channels (e.g. messenger) in which they could introduce or increase their advertising frequency (think Forbes). They could even disclose to end-users that these additional advertisements were being served specifically as they are within the EU, similar to the ubiquitous cookie pop-ups they are already well adjusted to seeing.
    - 9y ago

interfixus 9y ago

I don't get it. How could anyone be deceived? How could anyone imagine that anyone could be deceived? How could anyone assume - how could it technically be the case - that data from one system should not be mergeable with data from another?

techstrategist 9y ago
The deception does not have to be believed to be a deception. Facebook explicitly lied to the EC: "When Facebook notified the acquisition of WhatsApp in 2014, it informed the Commission that it would be unable to establish reliable automated matching between Facebook users' accounts and WhatsApp users' accounts." "The Commission has found that, contrary to Facebook's statements in the 2014 merger review process, the technical possibility of automatically matching Facebook and WhatsApp users' identities already existed in 2014, and that Facebook staff were aware of such a possibility."
- Markoff 9y ago
  why did they approve it after finding they are already lying?

jakozaur 9y ago

Given that FB paid $19 Bln for WhatsApp, €110m seems to be a cost of doing business for Facebook. That may be calculated play. USA got very liberal antitrust policy, allowing massive M&A. Good for shareholders, bad for everybody else. E.g. the biggest four airlines in USA got over 80% market share. In Europe they just have 48%. That's why United can re-accommodate passenger and get away with it: http://www.economist.com/news/leaders/21721201-americans-are-treated-abysmally-their-airlines-they-should-look-europe-lessons-lack http://www.economist.com/news/leaders/21721201-americans-are...

denzil_correa 9y ago
> Given that FB paid $19 Bln for WhatsApp, €110m seems to be a cost of doing business for Facebook According to Facebook Q1 2017 results, it had ~7.2 Billion EUR revenue and 2.7 Billion EUR as net income. https://s21.q4cdn.com/399680738/files/doc_financials/2017/Facebook-Reports-First-Quarter-2017-Results.pdf https://s21.q4cdn.com/399680738/files/doc_financials/2017/Fa...
antr 9y ago
The fine is not due to any antitrust laws being breached, but because FB mislead authorities by providing incorrect information. > Indeed, the clearance decision was based on a number of elements going beyond automated user matching.
blowski 9y ago
I thought the same thing. It's like having to pay £1 extra on a £200 purchase - sure, just it add it to the bill.
- Bartweiss 9y ago
  I wonder if we could kill the secrecy by just doing this upfront? "Sure, you can have your acquisition. Here's a price sheet for the changes you've requested." Less hide and seek or regulatory expense, you can assess much larger penalties for dishonesty than for up-front admissions, and you can point the fees to something pro-social and help mollify people about Facebook's low tax rate.

nomercy400 9y ago

You should see it like this: 110 million euros to buy the permission to acquire all the data of all european WhatsApp users. Is this just the fine for lying? Or is this also the fine for combining personal information about european citizens? If only the fine for lying, then what the EU should do next is investigate the privacy concern. And possibly another fine could be the result of that.

kbart 9y ago
Yes, I was shocked that earlier conclusion was left standing. That's like being caught robbing a bank, but let to keep the stolen bags of money and just ordered to pay a parking ticket for a getaway car waiting outside on a sidewalk. That's a very bad precedence and message to future deals, that it's OK to ignore EU laws if you are ready to pay small (comparatively) amount of money for it.
- riffraff 9y ago
  the merger was approved accounting for user matching ("'even if' assessment that assumed user matching as a possibility"). Knowing this in advance would have not changed the approval from the commission, your comparison is wrong, and it would set a bad precedent only for people who didn't actually read the case.

easilyBored 9y ago

Facebook fined €110M for providing misleading information on WhatsApp takeover Should be fine plus undoing what they did. or spin Whatsapp...go back to square one.

timow1337 9y ago

I'm in favor of the ruling but I don't understand why the European commission has any authority over two american companies merging?

adamnemecek 9y ago
Because they are doing business in said counties.
brute 9y ago
Maybe it is because of Facebook Ireland Limited, which technically is the company everyone outside of USA and Canada does business with
Markoff 9y ago
because if you wanna do business in some country you have to comply with local law even if it's internet company
deleted 9y ago
[deleted]

0verc00ked 9y ago

Well of course they were aware. And the Commission should have been aware. Here's a quote that stuck out to me: “Consumer communications services: the Commission found that Facebook Messenger and WhatsApp were not close competitors and that consumers would continue to have a wide choice of alternative consumer communications apps post-merger” The first part doesn’t sound right. If WhatsApp and Facebook Messenger aren’t close competitors, I need to figure out what a competitor is. Hmmm.. http://www.businessdictionary.com/definition/competitor.html http://www.businessdictionary.com/definition/competitor.html I suppose it's because they are not rivals? They were pre acquisition. Because they definitely operate in a similar industry with a similar product/service. It’s true that consumers can choose to use alternatives.

sleepychu 9y ago
I use both, a lot of people I know use both. I think they fulfil different markets.
wayn3 9y ago
They are concerned about actual monopolies. There are hundreds of messenger apps out there that roughly work the same way. If facebook suddenly charged $100/day for whatsapp, people would just use something different. Like Kik or whatever. Its true that those competitors dont really have market share. But thats not the point. They exist and are readily accessible. If facebook wants to shoot itself in the foot in trying to force its customers to use their competitors, thats just healthy competition. Therefore, there's no real threat of a monopoly here. Facebook bought a network effect, not a monopoly. Compare that to something like mobile carriers. If At&t buys verizon and spring or whatever they're called, there ARE no other options. Antitrust laws are mostly about keeping market mechanics in tact. Facebook and Google cant really force anyone to use their products. If their products are too expensive, there are lots of competitors. That's why they want to get rid of net neutrality. Making it expensive to run competing services strengthens their position.

SkeptinenSpede2 9y ago

Facebook is known by lies and privacy violations, is this even news worthy ?

mike-cardwell 9y ago

Why a fine? Why aren't they being banned from operating WhatsApp in the EU? And being forced to delete any data connecting the accounts to Facebook accounts if they want to continue operating Facebook within the EU?

cbg0 9y ago
Because they can only fine the company, according to the regulation http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32004R0139 http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:320...
Markoff 9y ago
can't imagine what would ban of Facebook messenger and whatsapp do for european IM market, sadly it ain't gonna happen but people in Signal and Threema would be celebrating for months

torrent-of-ions 9y ago

"Today's decision sends a clear signal to companies that they must comply with all aspects of EU merger rules..." More like: "Today's decisions sends a clear signal that it costs €110M to escape EU merger rules."

stefek99 9y ago

What would happen if they told the truth? Why investigating after the fact, not during the M&A?

mtgx 9y ago
Because like many other people, the EC made the mistake of trusting Facebook on its word. Don't do that. Ever.
wayn3 9y ago
Because the european commission likely has no executive antitrust agency that would be capable of overseeing this.

MiddleEndian 9y ago

Fines like this are mostly pointless, a cost of doing business. If governments want to stop being defrauded by corporations, they need to respond with criminal penalties like imprisonment, the same as they would to a regular citizen.

utternerd 9y ago
We throw people in jail far too often as it is, and you want to add to the prison population for something that didn't harm anyone? I honestly don't follow. If this were executives covering up the harmful effects of their product on humans, I'd agree. The Government makes the vast majority of their money off corporate profits, so they have a vested interest in seeing them succeed.
- MiddleEndian 9y ago
  I do agree that we throw people in jail too often, but if we're going to let corporations straight up lie for a low price, what we're charging is a usage fee, not a penalty.

ykler 9y ago

It is obvious that it would be possible to match accounts in a great many cases, and if the commission wanted to know more precisely how good the matchings could be, it seems like it would make more sense for them to ask Facebook and WhatsApp for social graph data and hire their own scientists to investigate that than to trust Facebook's answers on such a subjective point. But really it seems like they must have basically just been OK with Facebook monopolizing messaging because it was obviously pretty terrible for competition to allow this merger even assuming they thought the users of Facebook and WhatsApp wouldn't be able to be merged very well. However, I would be really curious to hear from someone who knows something about their actual thinking and motivations (and I guess what the law says since they may be quite constrained by that).

RodericDay 9y ago

> I used to be as against ads as you are, and then I tried to start a business > Overall, I'm in mild agreement that society would be better if it weren't ad-driven, but that's a utopian ideal Sounds like the typical conservative spiel. "I used to be idealist like you once, but then I realized how the world really works and sold out". There's a short mini-doc freely available out there, made by an heir of the Johnson & Johnson family, about the 1%. He was inspired to do this partly because his father had, in his day, gone out of his way and caused trouble by participating in some controversial (at the time) anti-apartheid demonstrations. However, he was now berating his son for his "idealism" in discussing the issue of inequality, coming off as insanely hypocritical in the process. It's a really poor way of arguing a point, imo.

dahart 9y ago
> Sounds like the typical conservative spiel. That's hilarious; most people who know me consider me a socialist. > There's a short mini-doc I've seen it, and it's fantastic. It's not about advertising. > It's a really poor way of arguing a point, imo. That's hilarious coming on the heels of an ad-hominem. Do you have any counter argument? Poor as it is, it's true, I'm sharing my feelings as someone with experience on both sides. The person I replied to, and you, and me, we all have the power within us to make ads irrelevant to our lives. And yet we don't. Why? The person I replied to seems to suggest he has an inalienable right to consume free content. Is that true? Does he deserve high quality free content, ad-free? Is it really the advertisers' fault that ads exist? Do you believe that taxing advertisers is the solution to reducing the scourge of ads? Anyway, I've upvoted you for making me laugh.
- RodericDay 9y ago
  First, you sound like an american, so being called "socialist" doesn't really mean anything. Center-right, Center, and center-left politicians are routinely called "socialist" in the US. Additionally, it's not an ad-hominem when I'm criticizing the form your appeal is taking. "I'm being ad-hommed!" is another telltale sign of someone who thinks they're better at rhetoric than they actually are. As for the matter in question, many of us do use advertisement blockers, and when the content is truly paywalled, we engage in required transactions to obtain access to it. It's risible that you consider yourself a socialist when you unironically spin the peddling of addictive clickbait garbage as "consuming free high-quality content". As bizarre a way to describe Facebook or Buzzfeed as I've ever witnessed. Taxing ads, and outright banning them from targeting anyone but adults, seem like nice first steps.

welpwelp 9y ago

Who's profiting from these 110M? :3

baahh3333 9y ago

110 million is nothing for Facebook in comparison with the treasure trove of data and user identities they have conveniently "acquired" from all the countries which are using Whatsapp.

sambe 9y ago

Bit off-topic, but the end of the article lists the three reasons the original deal was cleared. They seem naive to the point of absurdity: Facebook Messenger and WhatsApp were "distant competitors"? They are number one and two messaging apps in my circle of friends and acquaintances.

hobarrera 9y ago

Gee, it was stupidly obvious that Facebook could automate crossing information: * It constantly prompts people for their phone numbers (and most people provide it). * For new accounts, is REQUIRES a phone number. Whatsapp accounts are based on phone numbers. Isn't it quite obvious how easy it is to cross accounts? Do I REALLY need to spell this out further?

Markoff 9y ago
you can have dual SIM phone
- hobarrera 9y ago
  Facebook affirmed they could not cross information between their users and whatsapp users. Dual SIMs are irrelevant to this, a very very small minority of the users will be providing using this feature to have separate numbers of facebook and whatsapp.
riffraff 9y ago
it was, which is why the commission accounted for it when approving the merger. The fine is only because they lied about it.

sandov 9y ago

I Guess it's time for people to switch to a better IM platform. I'm tired of having to use WhatsApp because everyone else does.