UK fines Facebook £50.5M for breaching order
Social networking giant hits out at Competition and Markets Authority, calling its decision 'unfair'
The UK’s Competition and Markets Authority (CMA) on Wednesday fined Facebook £50 million ($69 million) for breaching an order during its investigation into the social networking giant’s purchase of Giphy, a GIF platform.
Facebook in June 2020 was ordered by the CMA to continue to compete with Giphy, and not integrate the platform while the investigation was ongoing.
The CMA said that the social networking platform had deliberately failed to comply with its order by significantly limiting the scope of its updates about compliance with the order, despite repeated warnings.
This, the competitions watchdog said, fundamentally undermined its ability to prevent, monitor, and correct any issues.
“Initial enforcement orders are a key part of the UK’s voluntary merger control regime. 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," said Joel Bamford, senior director of mergers at the CMA.
“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,” the official added.
Bamford said the fine "should serve as a warning to any company that thinks it is above the law."
In response, Facebook hit out at the competition regulator, saying it disagrees with the "unfair decision." "We strongly disagree with the CMA's unfair decision to punish Facebook for a best effort compliance approach, which the CMA itself ultimately approved,” a spokesperson said. "We will review the CMA's decision and consider our options."
Separately, the CMA said it fined Facebook £500,000 ($690,000) for changing its chief compliance officer on two separate occasions, without seeking consent first.
The development comes amid reports that Facebook plans to rebrand and focus on building the metaverse, the next version of the internet.
Facebook is already under severe criticism over leaks from whistleblower Frances Haugen who accused CEO Mark Zuckerberg of pushing for higher profits while not showing concern about user safety.
Meanwhile, earlier this month, Facebook, Instagram and WhatsApp, the apps owned by Facebook, stopped working for millions of users worldwide for more than six hours, an outage blamed on “faulty configuration change.”