British regulator fines Facebook $70 million
The UK's Competition and Markets Authority (CMA) fined Facebook almost $70 million for breaking an order imposed by the CMA during its investigation into Facebook's purchase of Giphy.
CMA said Facebook had failed to provide full updates about its compliance with requirements to continue to compete with Giphy and not integrate its operations with Giphy's while its investigation was ongoing.
Given the fact that Facebook did not provide the required updates despite multiple warnings, CMA considers this failure deliberate and issued a £50,5 (approx. $70 million) fine for what it called a "major breach, which fundamentally undermined its ability to prevent, monitor and put right any issues."
Separately, the CMA has fined Facebook £500,000 (approx. $700,000) for changing its Chief Compliance Officer on two separate occasions without seeking consent first.
"Companies are not required to seek CMA approval before they complete an acquisition but, if they decide to go ahead with a merger, we can stop the companies from integrating further if we think consumers might be affected and an investigation is needed. 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," Joel Bamford, Senior Director of Mergers at the CMA, is quoted in a press release.
The fine, he added, should serve as a warning to any company that thinks it is above the law.
The CMA's investigation into Facebook's merger with Giphy is ongoing, and it will work constructively with the companies as things progress further. No decision has yet been reached in relation to the merger.
According to Reuters, Facebook "strongly disagrees with the CMA's unfair decision to punish Facebook for a best-effort compliance approach, which the CMA itself ultimately approved.”
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