Facebook has been fined GBP 50 million by the UK Competition and Markets Authority for failure to cooperate with the regulator's investigation into Facebook's proposed takeover of Giphy. The CMA said it appears Facebook deliberately did not report all the compliance information requested by the regulator.
The case concerns a so-called initial enforcement order, issued by the CMA at the start of its investigation of the Giphy takeover in June 2020. This requires the companies to continue to operate separately and compete with each other until the acquisition receives regulatory clearance. As part of the process, Facebook was required to provide regulator reports to the CMA on its compliance with the order.
According to the CMA, Facebook "significantly limited the scope of those updates", despite repeated warnings from the regulator. 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.
The fine is a first for the UK regulatory regarding IEO compliance. Given the multiple warnings it gave Facebook, the CMA said it considers that Facebook’s failure to comply was deliberate. In addition to the GBP 50 million fine for this "major breach", the regulator fined Facebook GBP 500,000 for changing its Chief Compliance Officer on two separate occasions without seeking consent first.
The investigation into the Giphy takeover is ongoing. The CMA said in August that it had serious concerns about potential harm to competition from the deal and would be proposing remedies for the deal. The deadline for deciding on the takeover is 01 December.
