Facebook has been fined $70 million or £50.5 million for breaching an order given by the competition regulator in the United Kingdom. The said breach was in regards to the social media giant's acquisition of GIF platform Giphy.
Facebook Fined for Breach
On Oct. 20, the Competition and Markets Authority or CMA handed out the penalty and issued Facebook an initial enforcement order as it started to investigate the company's acquisition of Giphy, according to The Verge.
The order was created to ensure that companies continue to compete fairly without a merger, preventing them from integrating.
Facebook is required by law to give the CMA regular updates to show that it complies with the order.
However, the CMA stated that the company limited the scope of the updates despite sending them warnings.
CMA also stated that this is the first time a company has refused to report all needed information. The regulator added that the social media giant's failure to comply was deliberate and that they've sent multiple warnings to no avail.
A spokesperson for Facebook told CNBC that the company disagrees with the fine and called the whole thing unfair.
The spokesperson added that the social media company would review the decision and continue to consider other options.
The senior director of mergers at the CMA, Joel Bamford, said that initial enforcement orders are the main part of the U.K.'s voluntary merger control regime.
Bamford added that companies are not required to seek approval from CMA before they complete an acquisition, but if they decide to push through with the merger, they can stop the companies from integrating further if they think consumers might be affected and an investigation is needed.
Bamford added that they warned Facebook that its refusal to give them all the important information was a breach of the order, but even after losing its appeal in two different courts, Facebook disregarded its legal obligations. He said it should serve as a warning to any company that thinks it is above the law.
In August, the CMA stated it had found Facebook's purchase of Giphy as harmful to its competition, especially between other social media platforms, and removed a challenger in the advertising market.
The CMA stated that it might require Facebook to unwind the deal worth $400 million and sell Giphy if its competition concerns are confirmed.
In March, the CMA announced that they launched an antitrust investigation on Facebook due to its misleading guidelines.
DPC Fine and Facebook Rebrand
Aside from the CMA of the U.K., other European officials are also preparing to fine Facebook. Last week, Ireland's Data Protection Commission or DPC planned to fine Facebook up to €36 million or $40 million for lack of transparency over what the company does to their users' data.
However, for privacy campaigners and officials at other watchdogs, Ireland's decision gives Facebook leeway to collect data on users without obtaining their content to do so, according to Politico.
The argument over the limits of Europe's data protection law is expected to heat up in the next few weeks as data protection watchdogs from 27 European countries are invited to weigh in on Ireland's draft Facebook decision before a final decision is made.
Despite all of the issues with international watchdogs, Facebook is still planning on rebranding the platform in hopes of giving it a fresh start.
This article is owned by Tech Times
Written by Sophie Webster