European Union regulators levied a fine of nearly $270 million against
‘s WhatsApp after a probe found the chat business had broken EU data-protection guidelines.
The ruling against Facebook (ticker: FB), issued by Ireland’s Data Protection Commission acting on behalf of EU members, included a fine of 225 million euros ($266 million) plus a directive for WhatsApp to change the way it explains its policies to users to comply with regulations.
The Irish Commission found that WhatsApp failed to properly inform Europeans, including people who don’t use WhatsApp, both about how their data is gathered and used by Facebook in the app and also about how it is shared across the company.
Facebook has three months to change the way WhatsApp outlines its privacy policies with Europeans and bring it into compliance with a set of 2018 privacy rules known as the General Data Protection Regulation, or GDPR. Regulators in Europe launched the investigation into WhatsApp after the GDPR went into effect.
In a statement, a WhatsApp spokeswoman said that the company plans to appeal the decision, and called the penalties “entirely disproportionate.”
“WhatsApp is committed to providing a secure and private service. We have worked to ensure the information we provide is transparent and comprehensive and will continue to do so,” the spokeswoman said.
Investors don’t typically react negatively to fines levied against to Big Tech. Many investors consider them a cost of doing business—traffic tickets—and, in this case, a relatively small one. Thursday’s fine would amount to less than 0.7% of the company’s projected 2021 profit. Still, Facebook shares fell 1.2% to $377.32 in afternoon trading.
WhatsApp falls under the Irish DPC’s jurisdiction because it, and many other tech companies, have their European headquarters in Dublin, according to the Associated Press.
Ireland’s regulators are charged with keeping an eye on American tech companies that are headquartered there. The AP reported the Irish Data Commission has roughly 24 other open investigations into tech businesses such as
(TWTR), Alphabet (GOOGL), and another matter involving WhatsApp.
Facebook can appeal Thursday’s fine in Ireland and in the EU, according to The Wall Street Journal.
Write to Max A. Cherney at email@example.com