Upcoming AWS Coverage on Weibo Post-Earnings Results

LONDON, UK / ACCESSWIRE / May 19, 2017 / Active Wall St. blog coverage looks at the headline from Facebook Inc. (NASDAQ: FB). A press release from the European Union's anti-trust regulator the European Commission (EC), on May 18, 2017, stated that it has fined Facebook to the tune of ?110 million (approximately $122 million). The fine has been imposed on Facebook for providing incorrect or misleading information in 2014, when the EC was investigating Facebook's acquisition of WhatsApp. Register with us now for your free membership and blog access at:

http://www.activewallst.com/register/

One of Facebook's competitors within the Internet Information Providers space, Weibo Corp. (NASDAQ: WB), reported on May 16, 2017, its unaudited financial results for the first quarter ended March 31, 2017. AWS will be initiating a research report on Weibo in the coming days.

Today, AWS is promoting its blog coverage on FB; touching on WB. Get all of our free blog coverage and more by clicking on the link below:

http://www.activewallst.com/register/

This is the first time that the EC has imposed a fine on any Company for providing incorrect or misleading information under the EC's 2004 Merger Regulation.

Commenting on the matter, Margrethe Vestager, Commissioner of The European Commission said:

"Today's decision sends a clear signal to Companies that they must comply with all aspects of EU merger rules, including the obligation to provide correct information. And it imposes a proportionate and deterrent fine on Facebook. The Commission must be able to take decisions about mergers' effects on competition in full knowledge of accurate facts."

Facebook's response on the matter was posted on its page which read:

"We've acted in good faith since our very first interactions with the Commission and we've sought to provide accurate information at every turn. The errors we made in our 2014 filings were not intentional and the Commission has confirmed that they did not impact the outcome of the merger review. Today's announcement brings this matter to a close."

The Fine

As per the EC's 2004 Merger Regulation, the EC can impose a fine a Company up to 1% of its aggregated turnover for intentionally or negligently providing incorrect or misleading information. The EC found that Facebook had committed two separate infringements. Firstly, the Company had provided incorrect and misleading information in the EC's merger notification form. Secondly, the EC feels that such infringements are serious and prevented the EC in making an informed assessment of the Facebook - WhatsApp deal as it lacked all relevant information.

The EC also noted that Facebook was aware that the details of the Facebook - WhatsApp deal was essential for EC's assessment. However, the EC also noted that Facebook acknowledged its infringement and cooperated with the EC in conducting the investigation efficiently. After taking into account all these factors, the EC feels that the fine of ?110 million is both proportionate and deterrent.

The Facebook ? WhatsApp Deal

Facebook had announced the acquisition of WhatsApp in August 2014 and notified the EC accordingly. At the time of the acquisition, Facebook had informed the EC that it was not technically possible to automatically link WhatsApp user data with Facebook profiles but this later transpired to be incorrect information. However, in August 2016, WhatsApp announced that it plans to share some user information, including phone numbers and usage data, with Facebook. The point of contention is that the Facebook staff had been aware that it was technically possible to match Facebook and WhatsApp users' identities even at the time of the acquisition and yet had not disclosed it to the EC.

Way Forward

The EC has clarified that its decision to impose a fine on Facebook will not have any impact on EC's decision to authorize the Facebook-WhatsApp deal. It also cleared that today's decision was not in any way related to the ongoing investigation with regards to the national antitrust procedures or privacy, data protection or consumer protection issues after WhatsApp changed its privacy policy in August 2016. The EC has already started a separate investigation in December 2016

Facebook is already facing heat from Europe's privacy protection regulators. In September 2016, Germany's watchdog ordered Facebook to stop collecting data from WhatsApp users and in November 2016, Facebook agreed to stop collecting data from WhatsApp users in UK.

Apart from EC, on May 16, 2017, France's data regulators fined WhatsApp ?150,000 for failing to prevent its users' data being accessed by advertisers. On May 12, 2017, the Italian Competition Authority fined WhatsApp ?3 million, for "inducing" users to share their personal data with Facebook.

Stock Performance

Facebook's share price finished yesterday's trading session at $147.66, climbing 1.94%. A total volume of 22.78 million shares exchanged hands, which was higher than the 3 months average volume of 15.76 million shares. The stock has surged 25.99% and 25.51% in the last six months and past twelve months, respectively. Furthermore, since the start of the year, shares of the Company have surged 28.34%. The stock is trading at a PE ratio of 36.99 and currently has a market cap of $427.12 billion.

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SOURCE: Active Wall Street