FACEBOOK has been fined a staggering £50.5million ($69.5million) for breaking UK rules when buying Giphy.
The Californian tech giant has been publicly reprimanded by the Competition & Markets Authority.
According to the CMA, Facebook breached an order imposed by the CMA.
This order prevents companies from quietly merging while an acquisition is being reviewed.
An Initial Enforcement Order was placed on Facebook in June 2020, relating to its purchase of GIF app Giphy.
But the CMA says Facebook breached this order.
“Initial enforcement orders are a key part of the UK’s voluntary merger control regime,” said the CMA’s Joel Bamford.
“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.”
According to the CMA, Facebook was asked to regularly outline its compliance with the order.
But Facebook is said to have “significantly limited the scope of those updates”.
The CMA says it gave Facebook repeated warnings, and is being fined £50million as a result.
In a damning statement, the CMA called it a “major breach”.
And the CMA said Facebook’s behaviour “fundamentally undermined [the CMA’s] ability to prevent, monitor and put right any issues”.
Facebook was also fined a further £500,000 for changing its Chief Compliance Officer twice “without seeking consent first”.
The fine is significantly lower than the maximum levy of 5% of Facebook’s revenue, which would have amounted to billions of pounds.
In any case, £50.5million is pocket change to a tech titan like Facebook.
The sum equates to $69.5million in US dollars – a fraction of the company’s $958.5billion stock market value.
We’ve asked Facebook for comment and will update this story with any response.
More to come…
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