Social media giant Facebook has been fined £50.5 million (US$69.1 million) for breaching an order imposed by the UK Competition and Markets Authority (CMA) during its ongoing investigation into Facebook’s purchase of Giphy.
The previously completed merger of Facebook and Giphy, the largest provider of GIFs and meme sharing services, ran into a potential roadblock from the CMA earlier this year. The CMA provisionally found that the merger would negatively impact competition between social media platforms, something that Facebook disagrees with.
Facebook is required, as part of the process, to provide the CMA with regular updates outlining its compliance with the IEO. Facebook significantly limited the scope of those updates, despite repeated warnings from the CMA.
The compliance reports are crucial to ensure that the CMA has oversight of the companies’ behaviour, including whether Facebook has been taking any action which might prejudice the outcome of its investigation.
“It is standard practice to issue an initial enforcement order (IEO) at the start of an investigation into a completed acquisition. 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 CMA said in a statement. “The CMA imposed this type of order on Facebook in June 2020 in relation to its purchase of Giphy.”
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