Facebook to pay USD 70 million fine for Giphy acquisition

Updated on Oct 22, 2021 08:48 PM IST  |  143.2K
   
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Facebook to pay USD 70 million fine for Giphy acquisition
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Social media giant Facebook has a habit of appearing on news headlines for all good and bad reasons and now once again it’s making a headline. This time the company has been fined EUR 50 million (USD 70 million) by the Competition and Market Authority in the United Kingdom. The new fine is imposed on the social media giant because it has concealed the information about its Giphy acquisition. According to the report, the UK regulators called out the deal by releasing an antitrust probe. Let’s have a clear picture of the entire matter.

“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. This should serve as a warning to any company that thinks it is above the law,” says Joel Bamford, senior director of mergers at the CMA.

Back in June last year when Facebook started its investigation into the acquisition deal, CMA issued an enforcement order to the social media platform. The order was to ensure that all the companies are competing in a natural way even in the absence of a merger. According to the orders, Facebook was legally required to provide updates to ensure that it's following the orders. However, CMA claims that Facebook “significantly limited the scope of those updates” after regular warnings.

CMA also suggests that Facebook was also found breaching an IEO and “consciously refusing” to provide all the required information. Moreover, the company also failed to comply with the orders after multiple warnings and that seems to be intentional.

Considering all the scenarios, the CMA has fined the social media giant EUR 500,000 for changing its Chief Compliance Officer on two different occasions. Several months back, the CMA revealed that Facebook’s acquisition of Giphy will impact competition between social media platforms and also remove a potential rival from the advertising market. The regulator also suggests Facebook unwind the deal and sell it to the concerned person. 

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