In May, the European Commission fined Facebook € 110 million for providing incorrect or misleading information during the Commission’s 2014 investigation under the EU Merger Regulation of Facebook’s acquisition of WhatsApp. During the compulsory notification procedure back in 2014, Facebook informed / confirmed to the Commission that it would be unable to establish reliable automated matching (information) between Facebook users’ accounts and WhatsApp users’ accounts. It stated this both in the written notification form and in a reply to a request of information from the Commission.

In August 2016 the Commission found out that, contrary to Facebook’s statements in the 2014 merger review process, the technical possibility of automatically matching Facebook and WhatsApp users’ identities already existed in 2014, and that Facebook staff were aware of such a possibility. Many of the Facebook AND WhatsApp users knew that long ahead.

According to the EU Merger Regulation, the Commission can impose fines of up to 1 percent of the aggregated turnover of companies, which intentionally or negligently provide incorrect or misleading information to the Commission. The Commission considers in the Facebook case that these infringements have been indeed serious, because they prevented it from having all relevant information for the assessment of the transaction. BUT, but, eventually it did not admit that the false statements from Facebook hampered it (from taking the clearance decision about the mergers’ effect) to an important extent, as the economic markets’ conclusions would not have been different than the one reached WITH the false statements.

What lies behind this looks very much like unwinding WhatsApp and Facebook (or suspending the economic working of the merger; for this merger, this would have meant the disrupture of services for months!) would have caused Facebook and WhatsApp much bigger (business) harm, than cooperating with the Commission during the fine procedure and the payment of the fine, € 110 million, which Facebook did not oppose to pay. The ball is now in the camp of the EU Commission, i.e. to rapidly modernise the procedural rules of notification of mergers.

The menace of the nullity of the merger if notified with false statements, is a much worse case scenario for companies, than having to pay a fine, as high as the fine may be.