Facebook Fined Over $122 Million By European Union

Facebook and WhatsApp

Facebook, the social media giant faced an unexpected event recently. The silicon valley giant faced a hiccup in its Whatsapp deal which made Europen Union (EU) angry. This led into EU fining Facebook for providing misleading information.

What Happened?

This dates to back to the year 2014 where Facebook was in the middle of the deal for buying WhatsApp. As the deal was international, The Facebook merger must also agree with the rules and regulations of European Union. 

As part of the regulations, European Union question Facebook regarding the future changes and when asked about the linking of user accounts, Facebook said it was not possible even in the future. 

European Union Fines Facebook
European Union Fines Facebook

But the problem here is that Facebook staff knwo about the user linking option in the year 2014 itself and thsi was found out by the comission contrary to that Facebook said. 

As a result, Facebook has to pay 1% of its annual revenue which will be $276 million in 2016. But the fine is further reduced to $122 million due to the cooperation from Facebook. EU sees that it will be a lesson for all the companies regarding mergers.

WhatsApp
WhatsApp was accuried by Facebook in 2014

EU competition commissioner, Margrethe Vestager said,

Today’s decision sends a clear signal to companies that they must comply with all aspects of EU merger rules, including the obligation to provide correct information. It imposes a proportionate and deterrent fine on Facebook. The commission must be able to take decisions about mergers’ effects on competition in full knowledge of accurate facts

Regarding the issue Facebook said,

Today’s announcement brings this matter to a close

Facebook said that it was unintentional and it had not changed the outcomes of merger inquiry. The comapny is facing similar but smaller issues resulting in fines in various areas icluding data collection of users and in many other areas.

Does This Affect Facebook?

Facebook CEO Mark Zuckerberg
Facebook CEO Mark Zuckerberg

This whole issue will result in these things for Facebook:

  • The fine is nothing but a scratch on the thick armor of Facebook
  • This issue does not even affect the Whatsapp accquisition
  • But this will be a lesson for the company to lookout in further deals which may cost the company more
  • There will be no affect for Facebook's operation or Whatsapp's

The issue as EU expected will be a lesson for companies to pay their complete attention in big deals and Facebook must stay away from issues from governing bodies as it is not having good time with those. Remember the basics app ban in India? Stay safe Facebook.

 

SOURCE: NYtimes

Tags: technology

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