- Oops!Something went wrong.Please try again later.
The UK's competition regulator has moved to fine Facebook (FB) £50.5m ($69.5m) after the social media giant ignored an order imposed during its investigation into Facebook’s purchase of GIF platform Giphy.
The company bought Giphy, a database and search engine for the short looping videos known as GIFs, for $400m (£290m) in May 2020 — the fifth largest acquisition in Facebook's history.
The Competition and Markets Authority (CMA) said it is standard practice to issue an initial enforcement order (IEO) at the start of an investigation into a completed acquisition.
The previous largest IEO fine issued by the CMA was £325,000. The CMA did not say how it had come to the figure of £5.5m.
This ensures that companies continue to compete with each other as they would have without the merger, and prevents the companies involved from integrating further while a merger investigation is ongoing.
The order was imposed on Facebook in June 2020.
Facebook is required, as part of the process, to provide the CMA with regular updates outlining its compliance with the IEO.
The CMA said that Facebook significantly limited the scope of those updates, despite repeated warnings. It was also criticised last year by the Competition Appeal Tribunal and Court of Appeal for its lack of cooperation with the CMA and “what might be regarded as a high-risk strategy” in relation to not complying with the IEO and not keeping the CMA updated as the IEO required.
"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," said Joel Bamford, senior director of mergers at the CMA.
"This should serve as a warning to any company that thinks it is above the law."
Watch: Facebook plans to change its name: report
According to the CMA, compliance reports are crucial to ensure that it has oversight of the companies’ behaviour, including whether Facebook has been taking any action which might prejudice the outcome of its investigation.
“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 Facebook company spokesperson said.
The news comes amid a busy week for Facebook, which is reportedly also mulling changing its name. First reported by The Verge, the rebrand could kick in as soon as next week in order to reflect its move toward building a 'metaverse'.
The Verge reported, citing a source, that CEO Mark Zuckerberg will lay out the change at the company's annual conference on 28 October.