META Meta Platforms Inc

By Natalia Drozdiak 

BRUSSELS--The European Union's antitrust chief said Friday that her department is reviewing a handful of recent merger clearances because of suspicions that companies misled investigators to secure approval.

The unusual reassessment of past mergers could lead to significant fines for the companies or--though highly unlikely and complicated--overturning the clearance.

It suggests that the regulator could be preparing charges against other companies similar to the ones it leveled in December against Facebook Inc.

In that case, the EU accused the social-media company of giving incorrect or misleading information to investigators during the probe of its purchase of chat app WhatsApp in 2014. Facebook said it provided accurate information to the EU about its plans and technical capabilities.

In an interview with The Wall Street Journal, Margrethe Vestager said the European Commission was scrutinizing instances in which company representatives from a range of different industries intentionally or negligently misinformed regulators probing planned mergers.

"In each and every individual case...we need correct information, in order to have the very high quality of our casework that we want to have, " Ms. Vestager said. "We have found in more than one case, that there was a case of misleading information."

The EU declined to identify the companies under the microscope, but the cases involve mergers whose reviews took place no more than five years ago. The commissioner said the EU was still deciding whether it would formally accuse the companies in these other cases as well.

If found guilty, Facebook and the other companies could face fines of up to 1% of global revenue. In an unlikely scenario, the EU could also revoke its decision to clear the merger, if the misleading evidence would have fundamentally changed the outcome of the merger's review.

The EU has already said its case against Facebook won't affect its previous decision to clear the merger.

The commission suspects Facebook inaccurately claimed during the 2014 takeover that it was unable to reliably match user accounts between Facebook and WhatsApp--something the company started doing two years later when it began combining user data across the services. The EU regulator is in the process of analyzing Facebook's response to the accusations, Ms. Vestager said.

It is rare for companies to be charged with making misleading statements during a merger-approval process in Europe, given the potential for fines and other sanctions. Lawyers representing companies in the merger-review process who are found to have lied to regulators could also be stripped of their licenses to practice law. The EU in December said it hadn't opened such cases since new rules that boosted fines came into effect in 2004.

Ms. Vestager said the commission over the past year had been looking at several cases involving misleading information, but that they wouldn't all necessarily be formally opened or decided upon as a package.

"We have to respect the flow of each individual case, even in these areas where it's procedural concerns that we have," she said.

Separately, the commission has been looking at whether it should change its rules that would expand the number of mergers that fall under its purview--to include companies with less revenue but which may hold commercially valuable data or products under development. That initiative, however, is unrelated to the procedural cases, the commissioner said.

In the interview, the EU antitrust chief also spoke about three open cases against Alphabet Inc.'s Google, including the case in which the EU has formally accused Google of skewing its online search results to favor its comparison-shopping service. Google rejects the EU's accusations in all three cases.

On the shopping case, Ms. Vestager said the EU was approaching "a final phase" of its investigation, adding that any negative decision against Google likely would involve remedies that are "future-proof" and therefore likely broader in scope.

"Instead of being specific on page design or screen design, I think it's very important [for us] to focus on how to allow competition," she said. "If you're very specific about what design, you may very quickly be caught up in time."

In an additional statement sent last year setting out its charges against Google in the shopping case, the EU already partly sketched out its demands as to how Google should change its business practices to assuage the bloc's antitrust concerns.

"Remedies may require Google to position and display competitors' comparison shopping services in the same way as it positions its own comparison shopping service in general search results," the EU shopping charge sheet said.

The EU also has formally accused Google of violating the bloc's rules by abusing its dominance with its Android mobile-operating system as well as its advertising service Adsense. News Corp, owner of The Wall Street Journal, has formally complained to the EU over Google's alleged anticompetitive behavior.

Write to Natalia Drozdiak at natalia.drozdiak@wsj.com

(END) Dow Jones Newswires

March 24, 2017 13:17 ET (17:17 GMT)

Meta Platforms (NASDAQ:META)
Historical Stock Chart
From Mar 2024 to Apr 2024

Meta Platforms (NASDAQ:META)
Historical Stock Chart
From Apr 2023 to Apr 2024