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Speaker 1: Facebook is facing a two hundred million dollar fine. The

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Speaker 1: e USE Antitrust Authority is suing Facebook, accusing it of

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Speaker 1: giving incorrect or misleading information to get approval for its

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Speaker 1: purchase of What's App, the internet messaging service. Facebook says

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Speaker 1: it has consistently provided accurate information about its technical capabilities

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Speaker 1: and plans. The social media giant has until January one

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Speaker 1: to respond to the e USE statement of objections. Approval

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Speaker 1: for the twenty two billion dollar deal is not in jeopardy.

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Speaker 1: Our guest is Thomas Graft, partner at Cleary Gottlieb in Brussels. Thomas,

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Speaker 1: what information is the EU alleging was incorrect or misleading?

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Speaker 1: So the issue is about the ability of combining the

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Speaker 1: accounts of What's Up users and Facebook uses and sharing

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Speaker 1: data between What's Up on Facebook. At the time of

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Speaker 1: the merchual uh, Facebook explained that such a kind of

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Speaker 1: combination would face technical technical difficulties and it couldn't reliably

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Speaker 1: do it on an automatic basis. So, Thomas, is are

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Speaker 1: the European regulators saying that they may revisit the combination

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Speaker 1: of What'sapp and Facebook. No, it doesn't look like that's

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Speaker 1: really an issue here because Even so, the Commission took

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Speaker 1: this question or that the information that Facebook provided into

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Speaker 1: account and sites it as one of the reasons why

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Speaker 1: there are no concerns. The Commission also identified other reasons

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Speaker 1: why there wouldn't be concerns even if Facebook and What'sapp

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Speaker 1: would combine their data, So there shouldn't be shouldn't be

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Speaker 1: any change in the substantive analysis of the transaction. The

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Speaker 1: question is really more a process issue whether Facebook correctly

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Speaker 1: responded to the missions questions and provided accrued information. So

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Speaker 1: what are the implications for future deals of Facebook in

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Speaker 1: Europe if the Commission finds against it? Where one possible

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Speaker 1: implication is that the Commission will look especially carefully at

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Speaker 1: information that that Facebook provides UM. It's clear that this

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Speaker 1: is a complex area UM where difficult technical questions are raised,

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Speaker 1: so we will have to see whether the concerns are

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Speaker 1: actually as It's perfectly possible that ultimately the Commission also

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Speaker 1: may find that there were no incorrect information. There was

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Speaker 1: a recent case that the Commission brought with along similar

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Speaker 1: lines with concerns about incorrect information. Ultimately the Commission concluded

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Speaker 1: that there was no issue. Well, Thomas, Facebook is apparently

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Speaker 1: saying now in two thousand and sixteen that it can

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Speaker 1: combine data with the share data with what's happened the

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Speaker 1: way that it said previously it could not. Is there

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Speaker 1: do we know factually what's likely to be found about

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Speaker 1: what it could do in two thousand and fourteen, and

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Speaker 1: whether or not it was able to actually share the

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Speaker 1: data back then. So it's indeed, it's in the early

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Speaker 1: days to reach a conclusion. The Commission seems to say

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Speaker 1: that they at this stage of the investigation belief that

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Speaker 1: the Facebook incorrectly represented its abilities to combine what's up

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Speaker 1: on Facebook data even in two thousand fourteen. But it's

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Speaker 1: true that between two thousand fourteen and two thousand sixteen

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Speaker 1: some time past, so it may be also possible that

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Speaker 1: you know, the capabilities evolved, Thomas. The EU antitrust complaint

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Speaker 1: caps a terrible year for Facebook in Europe and for

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Speaker 1: Google in Europe, and there is sort of a feeling

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Speaker 1: among Silicon Valley that the European regulators are looking closer

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Speaker 1: at the American companies. Do you think that that's that

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Speaker 1: there is a basis for that, Um, I'm not sure,

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Speaker 1: but that this is really about the American companies versus uh,

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Speaker 1: EU companies. I think what's probably true is that they

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Speaker 1: sort of, at least in some quotas, there is an

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Speaker 1: on these about big online companies and the data that

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Speaker 1: they hold and what the implications of that are for

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Speaker 1: antitrust uh And it's you know, also true that probably

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Speaker 1: true that the decision of Facebook to share data from

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Speaker 1: WhatsApp uses that that raised possible concerns and that caused

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Speaker 1: the Commission to look closer again at what Facebook represented

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Speaker 1: at the time. But I think these cases you need

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Speaker 1: to look at them each on their own merits. Tell

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Speaker 1: us what is the sort of the worst case scenario

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Speaker 1: here for Facebook? If they're a violation is found by

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Speaker 1: the European commit issition, so the Commission can impose a fine.

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Speaker 1: That's fine can go as high as as one percent

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Speaker 1: of total global turnover. Facebook also it seems unlikely that

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Speaker 1: it will reach those levels. Thank you so much for

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Speaker 1: joining us on Bloomberg Law. That's Thomas Graft He's a

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Speaker 1: partner at Clearing Gottlieb in Brussels. That's it for this

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Speaker 1: edition of Bloomberg Law. We'll be back tomorrow and hope

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Speaker 1: that you will be as well. Thanks to our technical

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Speaker 1: director Chris try Comey and our producer David Suckerman. You

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Speaker 1: can find more legal news at Bloomberg Law dot com

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Speaker 1: and Bloomberg Vienna dot com, and an invaluable website for

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Speaker 1: the little community at Big Law Business dot com. Coming

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Speaker 1: up on Bloomberg Radio, Bloomberg Markets with Carol Master and

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Speaker 1: Corey Johnson, and Carol is here to tell us all

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Speaker 1: about what's coming up. Hi June, Hi, Michael Um. Something

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Speaker 1: that really sticks out about this year's M and A market,

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Speaker 1: and that is the amount of deals that did not

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Speaker 1: get done. So we'll dig into that. And also, what

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Speaker 1: do you get a billionaire for Christmas? I'm thinking family

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Speaker 1: of Mr Trump and some others might need to listen

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Speaker 1: to this list. They might, I don't think I have to, Alright,

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Speaker 1: Stay tuned for all of that and more here on

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Speaker 1: Bloomberg Radio. I'm June Grosso with Michael Best. You've been

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Speaker 1: listening to Bloomberg Law. This is Bloomberg