The UK Competition and Markets Authority (CMA) has slapped a £50 million fine on Facebook for failing to comply with an order the regulator imposed when the tech giant acquired online GIFs & animated stickers company, Giphy.
In a statement, the CMA noted Facebook failed to provide it with regular updates outlining its compliance to an Initial Enforcement Order (IEO), which is issued as standard practice at the start of an investigation into a completed acquisition.
The IEO ensures companies continue to compete with each other as they would have without a takeover and prevents further integration while an investigation is ongoing.
CMA explained it imposed the IEO in June 2020, but Facebook had “significantly limited the scope of those updates”.
Facebook was also criticized by a competition appeal tribunal and court of appeal for a lack of cooperation with the CMA, in what it “regarded as a high risk strategy”.
CMA stated this is the first time a company was guilty of breaching an IEO and despite multiple warnings it believes Facebook acted deliberately.
Not above the law
Separately, the CMA fined Facebook £500,000 for changing its chief compliance officer on two occasions without seeking consent first.
Joel Bamford, senior director of mergers at the CMA said the fine “should serve as a warning to any company that thinks it is above the law”.
The CMA’s wider investigation into Facebook’s tie-up with Giphy remains ongoing.
It launched an in-depth probe into the deal shortly after its completion in May 2020 and has warned Facebook it may need to unwind the move due to competition concerns.
Investigations into the deal are still ongoing.
Meanwhile, Facebook is reportedly considering a name change to Meta or Horizon due to its dented image in recent times. But experts say the tech giant would need more than just a mere name change to save its battered reputation.