The European Union’s competition officials have formally filed charges against Facebook, accusing the company of making misleading statements when seeking regulatory approval to purchase WhatsApp in 2014.
This accusation could lead to a fine up to one percent of the social media giant’s yearly revenues, making it the biggest fine ever imposed by the regulating body.
What’s Up with WhatsApp
For such a weighty fine, it would imply Facebook’s leadership was committing acts that lead to massive breaches of trust between the company and the EU leadership.
It’s important to point out that what’s actually happening is something far less sinister and much more nuanced. The accusation is that Facebook didn’t disclose future plans to match individual Facebook accounts with those on WhatsApp, which now has over a billion users worldwide.
Sparks started to fly in August when Facebook announced that it would start sharing some users’ data between the two accounts, allowing the parent company to send intelligent advertising or friend suggestions to WhatsApp users.
Although this may seem like a small thing, the bigger problem for both Britain and the EU is this sort of activity can create a competitive edge that companies a fraction of the size of Facebook can’t match. Not disclosing this eventuality during merger hearings may have altered the outcome of the process, resulting in the issue at hand.
This is Not About Sharing Data
Whatever rumors are floating around about WhatsApp and Facebook, the problem is not the data sharing, as such.
It’s the creation of a new and bolder WhatsApp that has access to all the data Facebook has spent a decade collecting. Even though this app already has a billion-person following worldwide, throngs of additional users may want to switch from other programs knowing the functionality would be potentially greater than any competitor could ever hope to achieve. In essence, it’s a form of digital EU trust-busting.
Facebook maintains that it acted in good faith when seeking the original deal’s approval and that it contacted the EU’s regulatory body when it decided to make these changes to WhatsApp. The announcement came in August, followed by a fast response from Germany demanding their users be excluded from sharing. Britain followed soon after, and by October 2016, Facebook had removed all users in the 28 EU-member countries from the data sharing campaign.