The U.K.’s competition regulator fined
Facebook Inc.
FB -0.06%
50.5 million British pounds, equivalent to $69.6 million, alleging it breached reporting requirements during a continuing review of its proposed takeover of Giphy, a provider of animated images for use in social media.
The Competition and Markets Authority said Wednesday that Facebook had failed to provide required updates outlining its compliance with an interim order the watchdog imposed in 2020, as part of its review of the Giphy deal. The CMA said that it had given Facebook multiple warnings to provide the required information, and that it believes the company’s “failure to comply was deliberate.”
“This should serve as a warning to any company that thinks it is above the law,’’ said
Joel Bamford,
a senior director of mergers at the CMA.
Facebook described the allegation of a deliberate failure as a mischaracterization. The company said it provided regular compliance statements to the CMA, and that the regulator was slow to grant standard exceptions to what Facebook said was an overly broad compliance order.
“We strongly disagree with the CMA’s unfair decision to punish Facebook for a best effort compliance approach,” a Facebook spokesman said. The company said it would review the decision and consider its options.
Facebook bought Giphy in May 2020, paying $315 million, according to documents published as part of the CMA’s merger review. The CMA said Wednesday that it is still reviewing the Giphy deal. In August, it warned that it could require Facebook to unwind the deal after provisionally finding that it would harm competition. A final decision is due before Dec. 1.
Giphy allows users to search for, create and share animated images known as GIFs, which stands for graphics interchange format. When Facebook bought Giphy last year, the company said it planned to integrate it into Instagram and other apps.
The CMA fine comes as tech companies face growing regulatory scrutiny. In late spring, the CMA and the European Union’s top competition regulator opened formal antitrust investigations into Facebook’s classified-ads service Marketplace as well as its online-dating service. Facebook has said it is cooperating with those probes and that its service operates in a highly competitive environment.
Momentum has built on both sides of the Atlantic for proposed legislation to rein in tech giants and social media companies following The Wall Street Journal’s publication of a series of articles based in part on internal Facebook documents that show the company’s struggles to manage products and systems at the heart of its business success.
Frances Haugen, the former Facebook employee who gathered documents that formed the basis of that series, and later testified before the U.S. Congress, is scheduled to appear before the U.K.’s Parliament on Monday.
Write to Sam Schechner at [email protected]
Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
For all the latest Technology News Click Here
For the latest news and updates, follow us on Google News.
