CMA slaps a fine of U.S. $ 70 million on Facebook for not sharing details of Giphy acquisition
The Competition and Markets Authority (CMA), the competition regulator in the United Kingdom (U.K.) today, i.e., Wednesday, October 20, 2021, slapped a fine of U.S. $ 70 million (£ 50.5 million) on Facebook for not sharing the required information regarding the acquisition of Giphy.
Giphy is an online database and search engine that allows users to search for and share short looping videos with no sound, which resemble animated GIF files. The CMA said that fine has been imposed on Facebook for repeatedly ignoring warnings and deliberately breaking its rules.
CMA has been investigating Facebook’s acquisition of Giphy. It issued an “Initial Enforcement Order (IEO)” related to the takeover in June 2020, requiring the companies to compete against each other as usual and halt any integration efforts during the investigation.
Speaking on the occasion, the Senior Director of Mergers at CMA – Joel Bamford 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.”
Taking it to twitter, CMA tweeted,
We’ve fined Facebook £50.5m for breaching an order we imposed during our investigation into their purchase of Giphy.
— Competition & Markets Authority (@CMAgovUK) October 20, 2021
This is the first time a company has breached an IEO by refusing to report information required after multiple warnings.
Read more: https://t.co/64SVu0zXsA pic.twitter.com/LOfbtUs6fS
Facebook was required to provide the regulator with regular updates about its compliance. Facebook significantly limited the scope of those updates. This is the first time a company has breached an IEO by consciously refusing to report all the required information. The £ 50.5 million fine is 155 times greater than the previous record for this type of breach. The investigation on Giphy acquisition is still ongoing
Separately, CMA has also fined £ 500,000 (U.S. $ 690,000) on Facebook for changing its Chief Compliance Officer on two separate occasions without first seeking its consent. Earlier in June 2020, U.K. and European Union (E.U.) said they are investigating Facebook’s use of data on antitrust grounds. Facebook is also facing the heat from its home country after a whistleblower went public with allegations that Facebook has repeatedly prioritized profits over public good. Appearing before the U.S. lawmakers earlier this month, Former Product Manager – Frances Haugen detailed a range of concerns including that the company knew it was serving harmful, eating disorder-related content to young users and that the use of Facebook by authoritarian leaders could present national security concerns.
