Facebook fined £50 million in first case of its kind

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Facebook has been fined £50.5 million by the UK’s competition regulator in the first of its kind.

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The social network was penalized over its acquisition of Giphy, a platform that allows people to share GIF images.

It is the latest in a series of regulatory issues for Facebook, which is also facing suggestions that it should be broken up and split off WhatsApp and Instagram into separate businesses.

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In the latest Giphy case, Facebook was accused of failing to provide the competition regulator with key information in the acquisition.

The Competition and Markets Authority (CMA) launched an investigation into the acquisition in June last year, shortly after the deal was announced, over concerns about “significantly reduced competition”.

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Giphy’s user-uploaded library of animated images is already integrated and widely used by Facebook’s family of social media apps, but can also be used on other platforms such as Twitter.

As part of the investigation, the social network was ordered to keep the two businesses separate until a conclusion was reached.

Under the initial enforcement order (IEO), Facebook is also expected to provide regulators with regular updates demonstrating its compliance, but the CMA said the firm has kept the scope of those updates despite repeated warnings. quite limited.

“Early enforcement orders are an important part of the UK’s voluntary merger control regime,” said Joel Bamford, senior director of mergers at CMA.

“Companies are not required to seek CMA approval prior to completing an acquisition, but if they decide to proceed with the merger, we may prevent companies from integrating further if we believe consumers may be affected. and require an investigation.

“We warned Facebook that refusing to provide us with important information was a violation of the order, but even after losing its appeals in two separate courts, Facebook continued to disregard its legal obligations.

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

Facebook responded to the fine, saying: “We strongly disagree with the CMA’s unfair decision to penalize Facebook for a best effort compliance approach, which was ultimately approved by the CMA itself.

“We will review the CMA’s decision and consider our options.”

The watchdog said this is the first time a company has breached an issued IEO by deliberately refusing to provide all required information.

Attempts by the social network to limit the terms of the CMA’s order were previously dismissed by the Competition Appeals Tribunal and the Court of Appeals.

Additional reporting by the Press Association

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Credit: www.independent.co.uk /

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