EU Accuses Facebook of Giving Misleading Information on WhatsApp Purchase

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Facebook potentially faces a fine of 1% of its global revenue if the European Commission’s accusations are confirmed. Photo: Patrick Sison/Associated Press

The European Union on Tuesday accused Facebook Inc. of giving “incorrect or misleading information” to investigators who were probing its purchase of chat app WhatsApp in 2014, opening the company up to a potentially massive fine.

The European Commission, the bloc’s top competition-enforcement body, made the accusation in a formal statement of objections, saying it suspects that Facebook inaccurately claimed during the 2014 takeover it was impossible to reliably combine user accounts between Facebook and WhatsApp.

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The company will have until the end of January to respond to the accusation that it breached EU procedural rules for the approval of mergers. The commission said the probe “will not have an impact” on its approval of the merger, but if the allegations are confirmed, Facebook could nevertheless receive a fine of up to 1% of its world-wide revenue. That could work out to up to $179 million based on Facebook’s 2015 revenue.

“We’ve consistently provided accurate information about our technical capabilities and plans,” a Facebook spokesman said. “We respect the commission’s process and are confident that a full review of the facts will confirm Facebook has acted in good faith.”

The accusation is a major surprise, two years after the EU approved Facebook’s $19 billion purchase of WhatsApp without any conditions. It builds the pressure on the social-media firm in Europe, where it is already facing separate probes by multiple national data-protection regulators about its announcement that it would start merging user data between WhatsApp and Facebook.

A body representing the EU’s 28 national data-protection regulators sent a new letter to Facebook outlining concerns about the sharing of data last week, while several regulators including those in Ireland, the U.K., Germany and France say they are investigating the issue.

The next step in the EU case will be Facebook’s response, after which the EU’s antitrust arm will decide whether Facebook was guilty of providing the misleading information and assess a fine. Any decision can then be appealed in court.

“A statement of objections is us raising concerns. We haven’t come to a final conclusion,” a European Commission spokeswoman said at a press conference Tuesday. She added that statements by Facebook and WhatsApp have led the commission “to believe there could be a deliberate omission of information. Facebook now has its right to respond and we will take it from there. “

Write to Sam Schechner at sam.schechner@wsj.com

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