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EU Investigates Facebook Over $19 Billion WhatsApp Takeover, Alleges Company Provided Misleading Information

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For Facebook, 2016's latter half has so far been rife with accusatory dialogue aimed at its services, having went through a diverse chorus of pundits who had lambasted its purportedly abysmal upkeep over rampant schmears of fake news, having been accused of arbitrary content censorship and presently having to face a lawsuit over its CEO's misguided approach attempt to set foot in politics.

Surely, it can't endure another blow with all these unresolved narratives, and yet it has to: another problem has risen for the largest social network in the world, and it has to do with its $19 billion purchase of WhatsApp in 2014.

Did Facebook Lie To The European Commission?

The European Commission said Tuesday that it was holding an investigation to determine whether Facebook lied or withheld information about its capacity to pull data from WhatsApp back when it announced that it was acquiring the company for the aforementioned sum.

The company has until Jan. 31, 2017 to acknowledge and respond to the commission's "Statement of Objections" on the matter. If the commission determines that Facebook indeed underhanded a crucial detail during its acquisition of WhatsApp, it could impose a fine of up to 1 percent of Facebook's turnover, Forbes reported.

In its statement, the commission recalled looking at an element during Facebook's planned acquisition of WhatsApp, whereby Facebook accounts being merged or matched with WhatsApp accounts stood as a disconcerting possibility. Facebook responded by saying that it would be "unable to establish reliable automated matching between the two companies' user accounts."

Changes To WhatsApp's Privacy Policy

In August, however, WhatsApp updated its privacy policy that included, among changes, the possibility of linking WhatsApp user phone numbers with Facebook accounts. The company explained that the change merely allowed Facebook to offer better friend suggestions or tailor relevant ads to users.

The commission believes that Facebook knew about this ability to match accounts from both services back during its acquisition of WhatsApp, essentially rendering Facebook's response as defunct, if not deliberately false. The commission now believes that Facebook had "intentionally, or negligently" given it misleading information, thereby breaching its obligations under the EU Merger Regulation.

This isn't the first time that a reputable tech company had to issue a payout to a regulator: Microsoft had to pay the commission almost $800 million in 2004 over bundling Media Player into Windows. The commission has also been looking into Google since 2015, having since threatened to impose a 10 percent fine on the company's annual revenue.

The proceedings remain to be seen. Facebook hasn't issued official word in light of the situation.

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