Facebook has been fined £50.5 million by the Competition and Markets Authority (CMA) for violating an order issued during the CMA’s inquiry into Facebook’s purchase of Giphy
The UK’s competition regulator penalised Facebook 50.5 million pounds ($69.6 million) for breaking an order issued during its inquiry into the social media giant’s acquisition of GIF site Giphy, the agency announced on Wednesday.
According to the Competition and Markets Authority (CMA), Facebook purposefully did not comply with CMA’s order, and the penalty served as a reminder that no organisation/company is above the law. Regulators and lawmakers have been increasingly critical of Facebook’s business practises.
The issuance of an initial enforcement order (IEO) at the commencement of an investigation into a completed acquisition is common procedure in the UK. This assures that companies continue to compete against one another as they would have done before the merger, and it inhibits the companies from further integrating while the investigation is continuing. In June 2020, the Competition and Markets Authority (CMA) issued a similar order in connection to Facebook’s acquisition of Giphy.
Giphy is a popular animated GIF picture generator utilised by Facebook’s competitors in social media apps, on mobile phones, and elsewhere online. As a result, there were concerns about possible competition.
Facebook stated that it did not agree with the CMA. While the investigation was ongoing, the regulator claimed Facebook had failed to provide full updates on its compliance with obligations to continue competing with Giphy and not combine its operations with Giphy’s.
Despite several warnings, Facebook had not delivered the essential information, according to the CMA, which regarded its failure to comply malicious. “We warned Facebook that its refusal to provide us with essential information constituted a breach of the order,” says Joel Bamford, senior director of mergers at the CMA. “Yet Facebook continues to flout its legal duties even after losing its appeal in two separate court rulings.”
