The Competition & Markets Authority has fined Facebook a record £50m after “deliberately” failing to give information to the UK regulator as it investigates the purchase of Giphy.
The fine, which is equivalent to 0.08% of Facebook’s 2020 revenue of £62.4bn, was issued today for a breach of an enforcement order made last June.
The CMA made the “standard” initial enforcement order (IEO) after launching an investigation into Facebook’s acquisition of picture archive site Giphy. It is meant to ensure companies can continue to compete as they would have without the merger and prevent further integration in case the companies are later banned from merging.
However, the CMA said Facebook failed to provide it with proof over the last year that it has been complying with the IEO.
“Facebook significantly limited the scope of those updates, despite repeated warnings from the CMA,” the regulator said in a statement.
It went on to say: “This is the first time a company has been found by the CMA to have breached an IEO by consciously refusing to report all the required information, the regulator added.
“Given the multiple warnings it gave Facebook, the CMA considers that Facebook’s failure to comply was deliberate.”
Facebook 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.
As well as a £50m fine for failing to comply with the IEO, the CMA issued another £500,000 for changing its chief compliance officer on two separate occasions without seeking consent first.
Joel Bamford, senior director of mergers at the CMA, said: “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.”
The investigation into Facebook’s merger with Giphy is ongoing and no decision has yet been reached in relation to the merger.
The CMA has powers to fine companies up to 5% of their total turnover (both in and outside the UK).
The previous largest IEO fine issued by the CMA was £325,000, to Irish software company ION, in August.
A Facebook spokesperson said: “We strongly disagree with the CMA’s unfair decision to punish Facebook for a best effort compliance approach, which the CMA itself ultimately approved. We will review the CMA’s decision and consider our options.”
