Facebook, Inc. has been fined £50.5mln by the UK Competition and Markets Authority (CMA) for breaching an order relating to the US social media giant's purchase of Giphy.
When Facebook acquired Giphy last year, the CMA imposed an initial enforcement order (IEO) on the companies to ensures that they continued to compete with each other while the CMA investigates the deal. This is standard procedure, the financial markets regulator noted.
As part of the CMA investigation process, Facebook is required to provide the regulator with regular updates outlining its compliance with the IEO. However, Facebook has failed to comply with the IEO and provide important information, CMA said.
It said it had given Facebook several warnings and considers the company's failure to comply “deliberate”.
“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 said.
It has imposed a fine of £50mln for the breach, which it said “fundamentally undermined its ability to prevent, monitor and put right any issues”.
In addition, the CMA has fined Facebook £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 CMA's investigation into Facebook's merger with Giphy is ongoing. No decision has yet been reached in relation to the merger.