WhatsApp Ireland, a subsidiary of Meta, has reported a surge in profits for 2022, reaching €41.1 million. The increase in profits can be attributed to a reduction in administrative expenses, particularly the funds set aside for regulatory fines. Earlier this year, WhatsApp was fined €5.5 million by the Data Protection Commissioner (DPC) for breaches of GDPR legislation. This is not the first time WhatsApp and Meta have faced fines from the DPC.
According to the company’s recently filed accounts, turnover at WhatsApp Ireland Ltd rose to €56.1 million in 2022, up from €41 million in 2021. The increase of €15.1 million is primarily due to an increase in service fees received from another group company as a result of heightened business activity. However, administrative expenses decreased from €39.3 million in 2021 to €15.8 million in 2022. This decrease was driven by measuring regulatory compliance provisions at present value, as well as a decrease in the best estimate of these provisions throughout the year.
It is important to note that while WhatsApp experienced savings in administrative expenses, there were increased costs associated with the direct provision of services to WhatsApp LLC. These costs included expenses related to consultants and facilities. Regulatory compliance provisions are estimates of potential administrative fines against the company. WhatsApp bases these estimates on advice from external legal counsel, regulatory correspondence, relevant mitigating factors, comparison with similar cases, and other factors.
As of January 1, 2022, WhatsApp had set aside €238 million for regulatory compliance provisions. However, this amount decreased to €193.4 million over the course of the year. The reduction was due to the measurement of provisions at the present value of the best estimate as of December 31, 2022, through discounting. Additionally, there was a movement in the best estimate of regulatory compliance provisions throughout the year.
As a result of these factors, WhatsApp reported a profit of €41.1 million for 2022, after receiving a tax credit of €300,000. This is a significant increase from the €1.8 million profit reported in 2021. The company currently employs 80 people, with total salaries and bonuses amounting to €9.15 million in 2022.
In May, Meta, the parent company of WhatsApp, was hit with a record fine of €1.2 billion by the DPC for personal data breaches. The DPC also ordered Meta to cease the unlawful processing and storing of EU user data in the US within six months. Meta has stated its intention to appeal this decision. Earlier this year, Meta sought to overturn a previous fine of €265 million imposed by the DPC for an alleged breach of EU privacy rules regarding the personal information of over 500 million Facebook users.