Facebook fined $70 million for hiding information about Giphy acquisition

Facebook has been fined nearly $70 million by a UK watchdog for deliberately withholding information about its Giphy acquisition.

The Competition and Markets Authority (CMA), investigating Facebook’s $400m takeover earlier this year, said the company “deliberately” refused to provide any information about the acquisition, even after it was issued an initial enforcement order (IEO) in June 2020 by CMA.

An IEO halts a company from further integration of its business and ensures that a company can compete as it would have pre-merger until the CMA is done investigating.

“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,” Joel Bamford, a director of mergers at the CMA told.

“This should serve as a warning to any company that thinks it is above the law,” he further added.

Bamford went on explaining the IEO requirement, “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 an 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.”

Facebook “strongly disagrees” with the CMA’s decision, stating that it had made the “best effort” to comply with the IEO.

“We strongly disagree with the CMA’s unfair decision to punish Facebook for a best effort compliance approach,” said a Facebook spokesperson. “We will review the CMA’s decision and consider our options,” they concluded.