UK competition watchdog fines Facebook for deliberately breaking rules

Facebook has been fined £50.5million by the UK’s Competition and Markets Authority (CMA), which claims it guilty of purposefully breaking rules.

This case was regarding Facebook’s 2020 acquisition of the Gif-sharing service Giphy, which is under investigation. The CMA stated that Facebook had not provided the necessary information and had ignored many warnings, thereby committing a “major breach”. The firm denies intentionally breaking rules. Some reports have also come forth in which the possibility of its name being changed has been considered. Tech news site called “The Verge” has revealed the news about the firm, which currently owns Facebook itself, along with WhatsApp, Instagram, Oculus VR, and other famous brands.

Giphy is widely used by Facebook’s competitors to produce animated images used in social media apps, on mobile keyboards, and elsewhere online. This led to potential competition concerns.

The CMA issued an “initial enforcement order”, which limits how companies that are unifying operate. It is drafted to keep the constituent companies semi-separate and in competition with each other until the investigation is complete. Facebook is compelled to provide updates to make  it clear that it is complying with the order.

“CMA has provided Facebook with may warnings but have received no reply, thus the CMA considers that Facebook’s failure to comply was intentional,” the CMA said. The fine for this offence is £50m. Separately, the CMA also announced a £500,000 fine for Facebook for changing its chief compliance officer ,twice ,”without seeking CMA’s permission first”. Facebook refuses the allegation that it intentionally broke rules, saying it had complied with the main obligations, and the matter is instead about the details of how it did so.

“We strongly disagree with the CMA’s unjust 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,” replied Facebook.

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