The United Kingdom’s (UK) Competition and Markets Authority (CMA) has fined Facebook £50.5 million for breaching an enforcement order imposed by the CMA during its investigation on Facebook’s purchase of Giphy.
In June 2020, the CMA imposed an enforcement order, which is standard practice at the beginning of an investigation into an acquisition, to prevent the two companies from integrating further while an investigation is conducted. The order ensures companies continue to compete with each other as though the merger had not taken place.
The order required Facebook to provide the CMA with regular updates demonstrating its compliance with the order. Facebook received repeated warnings as it failed to cooperate with the CMA.
Senior Director of Mergers at the CMA, Joel Bamford stated:
“Initial enforcement orders are a key part of the UK’s voluntary merger control regime. Companies are not required to seek CMA approval before they complete and acquisition but if they decide to go ahead with a merger, we can stop the companies from integrating further if we think consumers might be affected and an investigation is needed. 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 CMA fined Facebook £50 million for the breach of its order and £500,000 for changing its Chief Compliance Officer twice without first seeking consent.