Social media giant Facebook has been fined £50 million ($70 million USD) by the Competition and Markets Authority in the UK for purposely concealing information about its Giphy acquisition. The company’s dealings with Giphy were called out by the UK regulators, leading to CMA launching an antitrust probe.
The Competition and Markets Authority had issued an initial enforcement order to Facebook in June last year as it began its investigation into the acquisition deal. The order was aimed to ensure that companies continue to compete as they would in the absence of a merger and it prevents them from integrating further.
As a part of the order, Facebook is legally required to provide regular updates to show that it is complying with the order. But, CMA says that Facebook “significantly limited the scope of those updates” despite repeated warnings.
The regulator also noted that this is the first time a company has been found to have breached an IEO by “consciously refusing” to report all the required information. Further, it added that Facebook’s failure to comply was “deliberate” as the social media company was given multiple warnings.
Joel Bamford, senior director of mergers at the CMA, said: “We warned Facebook that its refusal to provide us with important information was a breach of the order but, even after losing its appeal in two separate courts, Facebook continued to disregard its legal obligations. This should serve as a warning to any company that thinks it is above the law.”
Separately, the CMA has fined Facebook £500,000 for changing its Chief Compliance Officer on two separate occasions without seeking consent first.
A couple of months ago, the CMA said it had provisionally found Facebook’s purchase of Giphy would harm competition between social media platforms and remove a potential challenger in the display advertising market. It also said that Facebook could be required to unwind the deal, which is reportedly worth $400 million, and sell off Giphy if its concerns are ultimately confirmed.
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