UK competition regulator fines Facebook £50m
Updated

Facebook has been fined £50m for breaching an order imposed by Britain's Competition and Markets Authority (CMA) during its investigation into the social media giant’s purchase of Giphy.
A CMA press release, published Wednesday on the UK government’s website, set out why the action was being taken.
“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 Competition and Markets Authority imposed this type of order on Facebook in June 2020 in relation to its purchase of Giphy,” the CMA said.
Facebook was required, as part of the process, to provide the CMA with regular updates outlining its compliance with the IEO. However, the CMA has accused Facebook of significantly limiting the scope of the updates, despite repeated warnings.
Facebook completed its acquisition of the online library and maker of GIFs on 15 May 2020 in a deal widely reported to be valued around $400m.
Social media giant under fire
The social media platform 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.
“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,” the CMA also said in the statement.
The CMA said it considers Facebook’s failure to comply as deliberate – and as a result, issued the fine of £50m for the breach.
Separately, the CMA said it has fined Facebook £500,000 for changing its chief compliance officer on two separate occasions without seeking consent first.
What is your sentiment on META?
'Disregarding legal obligations'
Joel Bamford, senior director of mergers at the CMA, said that initial enforcement orders were a key part of the UK’s voluntary merger control regime.
“Companies are not required to seek CMA approval before they complete an acquisition but, if they decide to go ahead with a merger, we can stop the companies from integrating further if we think consumers might be affected and an investigation is needed.
“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,” he said.
Bamford also added that the CMA’s action should serve as a warning to any company that thinks it is above the law.
Meanwhile, the CMA’s investigation into Facebook’s merger with Giphy is ongoing – and no decision has yet been reached in relation to the merger.
Facebook has strongly disagreed with the CMA.
Facebook shares opened higher in US trading at $343.45 per share, up from Tuesday’s closing price of $339.99.
Read more: Stocks today: Inflation falls but rate hike fears continue
Markets in this article
Related topics