The European Commission is investigating whether Facebook gave misleading information about its takeover of mobile messaging service WhatsApp.
The EU's executive body on Tuesday gave Facebook until Jan. 31 to answer a "statement of objections" about merger information the social media giant gave the Commission two years ago.
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The Commission, the EU's merger and anti-trust watchdog, is concerned that Facebook can match its users' accounts with WhatsApp user accounts. The company said in 2014 that it could not do this. But Facebook's August terms of service and privacy update suggest it can, according to the Commission.
"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 the opportunity to respond," EU Competition Commissioner Margrethe Vestager said in a statement.
Facebook could face fines of up to 1 percent of its turnover if those suspicions are confirmed.
The August update could allow a link-up between WhatsApp phone numbers and Facebook user identities, which could help Facebook offer better "friend" suggestions or display more relevant ads on the Facebook page of a WhatsApp user.
"Companies are obliged to give the Commission accurate information during merger investigations. They must take this obligation seriously," Vestager warned.
Such EU probes do not imply guilt, but they give companies the chance to examine relevant documents, reply in writing, or request an oral hearing.