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EU to Facebook: What's with that misleading WhatsApp info?

Could Facebook be slapped with a huge fine next year? Turn the page to chapter 2017 to find out.

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The EU delivered a lump of coal to Facebook on Tuesday in the form of a complaint that could cost the company a vast sum of money.

The issue is WhatsApp, and specifically, whether Facebook misled the European Union during its takeover of the popular messaging service back in 2014.

At the time of the takeover, Facebook told the European Commission it would be unable to reliably match people's social networking accounts to their mobile phone numbers using the data that WhatsApp brought to the table.

It turns out this wasn't the case. In August, WhatsApp linked user IDs to the corresponding Facebook accounts. This doesn't apply yet to users in Europe, as the European Commission is already investigating the legalities of the two entities sharing data.

But now the Commission says it has found another, bigger problem with Facebook being able to access user's WhatsApp data. It alleges that Facebook had the technical capabilities to do this all along and therefore either intentionally or negligently supplied misleading information at the time of the merger.

The complaint marks the start of yet another tussle between a Silicon Valley company and the Commission, which has a track record of holding the likes of Facebook, Google and Apple to account. If its allegations are found to be true, Facebook could be forced to pay a fine equal to one percent of its aggregate turnover, as stipulated by European law. Given that annual revenue for 2015 was over $17 billion, the fine would be in the hundreds of millions of dollars.

When two companies like Facebook and WhatsApp join together, the EU investigates whether the deal would hurt consumers or businesses operating in Europe. At the time it gave Facebook the thumbs-up to proceed with the acquisition, but this decision was at least in part based on the claim that the social network could not match and link Facebook accounts with WhatsApp accounts.

"Our timely and effective review of mergers depends on the accuracy of the information provided by the companies involved," said Commissioner Margrethe Vestager in a statement. "In this specific case, the Commission's preliminary view is that Facebook gave us incorrect or misleading information during the investigation into its acquisition of WhatsApp."

Facebook now has until January 31 to pull together an official response to the Commission's objections. But in the meantime, the company said it will continue to cooperate and share information that officials need to answer their questions.

"We respect the Commission's process and are confident that a full review of the facts will confirm Facebook has acted in good faith," said a spokeswoman for the company in a statement.

"We've consistently provided accurate information about our technical capabilities and plans, including in submissions about the WhatsApp acquisition and in voluntary briefings before WhatsApp's privacy policy update this year," she added.

When Facebook responds, the Commission will conduct a full inquiry.

As for when to expect an outcome? Don't hold your breath. There's no deadline for the inquiry, and the EU is well known for taking its time.