Facebook could be facing a potential fine after the European Commission has accused the company of providing misleading information about its $19bn takeover of messaging service WhatsApp.
The EU said that Facebook “intentionally or negligently” submitted misleading information, breaching EU merger rules.
The company faces fines of up to 1 per cent of annual sales or roughly $125m according to Facebook's annual revenue in 2014.
Margrethe Vestager, the EU's competition chief, said companies must take their obligation to give the Commission accurate information during merger investigations seriously.
She said: "Our timely and effective review of mergers depends on the accuracy of the information provided by the companies involved. In this specific case, 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."
Facebook will have until January 31 to respond to the European Commission.
The issue regards a WhatsApp privacy policy change in August in which it said it would share some users' phone numbers with parent company Facebook, triggering investigations by a number of EU data protection authorities.
Users of the instant messenger were given the ability to opt out of sending information to Facebook through settings in WhatsApp's applications on smartphones.
The Commission said Facebook had pledged in its notification of the acquisition that it would not combine the userbases if the two companies' in order to allay competition concerns.
European data protection group G29 formally expressed its concerns at the end of October.
"In today's Statement of Objections, the Commission takes the preliminary view that, contrary to Facebook's statements and reply during the merger review, the technical possibility of automatically matching Facebook users' IDs with WhatsApp users' IDs already existed in 2014," it said.
Facebook said that it had acted in “good faith” during the process.
“We respect the Commission’s process and are confident that a full review of the facts will confirm Facebook has acted in good faith,” a spokesperson for the company said.
Additional reporting by agencies
