The controversy over Mark Zuckerberg’s integration of WhatsApp into Facebook just won’t die.
A year after WhatsApp cofounder Brian Acton told Forbes he had been coached to tell European Union antitrust regulators that it would be difficult to merge WhatsApp and Facebook’s technology — shortly before the social network did just that — Zuckerberg was asked to defend Facebook’s actions to Congress.
Zuckerberg’s remarks, part of his testimony on his troubled cryptocurrency initiative Libra before the House Financial Services Committee, were in response to Congresswoman Nydia Velazquez. The New York Democrat used the integration of the two apps and Acton’s statements to Forbes as a means to show how the social network giant has played fast and loose with vows to regulators.
“Do you understand why this record makes us concerned with Facebook entering the cryptocurrency space?” said Congresswoman Velazquez. “Do you realize that you and Facebook have a credibility issue here?”
Facebook is the target of antitrust probes from nearly every state. The Federal Trade Commission and the Department of Justice are also reportedly probing the social network to investigate whether it has violated antitrust laws.
In 2014, when Facebook was finalizing its $22 billion acquisition of the encrypted messaging app WhatsApp, it needed to get approval from EU antitrust regulators. To prep for the meeting with about a dozen representatives from the European Competition Commission, Acton said he was instructed by Facebook to tell EU regulators that there were no plans to merge Facebook’s and WhatsApp’s data systems—which he and his cofounder Jan Koum believed was true at the time.
“I was coached to explain that it would be really difficult to merge or blend data between the two systems,” Acton said to Forbes.
But shortly after, WhatsApp launched new terms of service that showed the two systems had merged. The EU fined Facebook $122 million in 2017 for giving “incorrect or misleading information.”
“It just makes me angry to even relive that,” Acton said to Forbes last year. Acton, today worth $2.5 billion, left WhatsApp at the end of 2017. Several months later in March 2018, he famously tweeted “#deletefacebook” as the Cambridge Analytica scandal broke.
When the EU fined Facebook, a Facebook spokesperson at the time said that the errors were unintentional. Zuckerberg’s response to Velazquez’s line of inquiry alluded to the same sentiment, implying that the business plan had just changed. “I understand we have work to build trust on this,” Zuckerberg said. “That means making commitments, even if we learn new things in the future that could change our mind on how we should operate.”
A spokesperson for Facebook elaborated on Zuckerberg’s response, saying “it’s both factually wrong and offensive for the Congresswoman and other regulators to be characterizing this as Facebook having ‘lied’ – and worse, suggesting that we ‘coached’ WhatsApp to lie.”
Congresswoman Velazquez remains skeptical of Zuckerberg’s characterization of what happened, that the business plan had changed after Acton’s statement to the EU. “It is another reason members are worried about Facebook’s involvement/entrance into the cryptocurrency sector,” a spokesperson for Congresswoman Velazquez wrote in an email.
Zuckerberg was called to testify before Congress for his role in developing Libra, a cryptocurrency that will mostly be supported by dollars and designed to be spendable anywhere in the world. But on October 19, three new bills were introduced that aimed to keep big tech, notably Facebook, away from the finance sector.