Facebook was issued with a $70 million fine by the UK’s competition and Markets Authority (CMA), which accused it of deliberately breaking rules.
The case relates to Facebook’s 2020 acquisition of Gif-sharing service, Giphy, which is under investigation. The CMA has said that Facebook had not provided information, ignored many warnings and committed a “major breach”. The firm denies deliberately breaking the rules.
The $70m fine is more than 150 times higher than the previous record handed down for similar offences. When speaking about its decision to fine Facebook, the CMA said in a statement: “This is the first time a company has been found by the CMA to have breached an [order] by consciously refusing to report all the required information.”
Giphy is widely used by Facebook’s competitors to power animated Gif images used in social media apps, mobile keyboards and elsewhere online, which led to potential competition concerns.
The CMA issued something called an “initial enforcement order”, which limits how companies that are merging, but under investigation, operate. It’s designed to keep the entities separate and in competition with each other until the investigation is over.
Facebook is obliged to provide updates and information to make clear how it is complying with the order. “Given the multiple warnings it gave Facebook, the CMA considers that Facebook’s failure to comply was deliberate,” the CMA said. That “fundamentally undermined its ability to prevent, monitor and put right any issues”.
The CMA announced a £500,000 fine, separately, for Facebook changing its chief compliance officer – twice – “without seeking consent first”.
Facebook refutes the allegation that it deliberately broke rules, saying that it had complied with the main obligations and that the row is simply about the details of how it did so.
“We strongly disagree with the CMA’s unfair decision to punish Facebook for a best effort compliance approach, which the CMA itself ultimately approved. We will review the CMA’s decision and consider our options,” a spokesperson said.
Sources: BBC, Yahoo
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