Facebook Fined $69.9M By UK For Flouting Rules On Giphy Acquisition

The U.K.’s Competition Markets Authority (CMA) has fined Facebook, inc. FB $69.6 million for breaching a June 2020 initial enforcement order (IEO) mandated by the agency during its investigation into the social media giant’s purchase of Giphy.

What Happened: The CMA announced that the issuance of an IEO was standard practice when a probe begins into a completed acquisition. The agency stated that Facebook was required to provide regular updates related to its IEO compliance, but failed to cooperate in the process and “fundamentally undermined its ability to prevent, monitor and put right any issues.”

“This is the first time a company has been found by the CMA to have breached an IEO by consciously refusing to report all the required information,” the agency said in a press statement. “Given the multiple warnings it gave Facebook, the CMA considers that Facebook’s failure to comply was deliberate.”

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Why It Matters: Joel Bamford, senior director of mergers at the CMA, said that while companies do need his agency’s approval to transact a merger or acquisition, it has to power to “stop the companies from integrating further if we think consumers might be affected and an investigation is needed.” He also faulted Facebook’s “disregard its legal obligations” after losing its appeal in two separate court rulings.

“This should serve as a warning to any company that thinks it is above the law,” Bamford said.

Separately, the CMA fined Facebook an additional $688,000 for twice replacing its chief compliance officer without seeking the agency’s consent. Facebook did not issue a comment on the CMA's fines.

Photo: Mohamed Hassan / Pixabay.