There were strong indications that the representatives of Facebook did not come out clean in the deal to take over Whatsapp in 2014. According to Reuters, the European Union Antitrust Regulators accused Facebook of providing some false information in the preliminary stage of negotiations. This was found to be a stark violation of the European Commission’s code of conduct in the merger. The claim (which bordered on Facebook’s inability- as at then- to match users’ identities on its platform with those on Whatsapp,) is said to have been a means of tilting the negotiation process in Facebook’s favor.
However, in its defense, Facebook has since stated that it had no ulterior motives in the deal. This can be derived from the fact that the possibility of matching users’ identities on both platforms- Facebook and Whatsapp- only came to fruition two (2) years after the deal was struck. Furthermore, Facebook said the claim had no real effect on the outcome of the negotiations.
To counter this, the European Commission alleged that Facebook already had a plan of building such a feature back in 2014, but had decided to keep the information hidden at that time till it had acquired WhatsApp. Hence, with the formal launching of the feature in 2016, the commission swung into action in order to seek a redress in Facebook’s acquisition of Whatsapp.
Having carefully reviewed the matter, the commission has ruled that Facebook should pay a fine of $122 million to the complainant. In the words of Margrethe Vestager (EU Antitrust chief), this fine is a commensurate one that should aim at forewarning others [who are looking to have a smooth merger in the future]. It will be a lesson for such companies to avoid treating issues of compliance with levity and/or insincerity.
In response to the ruling, Facebook appears to have accepted its fate and hopes that the whole matter will be brought to a close even while it maintains that it’s absolutely innocent.
Image By Brian Solis (Getting facetime with Facebook’s CEO) [<a href=”http://creativecommons.org/licenses/by/2.0″>CC BY 2.0</a>], <a href=”https://commons.wikimedia.org/wiki/File%3AScoble-Zuckerberg-20080723.jpg”>via Wikimedia Commons</a>