Last Updated on 22/11/2021 by Sanskriti
On Wednesday the tech giant Facebook was fined with the amount of £50.5m ($70m) by the UK’s competition and Markets Authority (CMA), accused of violating the laws in an ongoing investigation. The lawsuit concerned Facebook’s acquisition of Giphy, a GIF-sharing startup, in 2020, which is now being investigated.
According to the CMA, Facebook failed to disclose information, disregarded many warnings, and committed a “serious breach.” The company denies breaching the regulations on purpose.
It’s also possible that its parent company will change its name.
According to the authority, this was the first time a firm was determined to have deliberately refused to disclose needed information in violation of an initial enforcement order. Such orders are common at the outset of an inquiry into a completed merger and are intended to keep firms from further merging while the investigation is underway.
For breaking the injunction, the business was fined 50 million pounds, plus additional 500,000 pounds for replacing its chief compliance officer twice without approval.
The CMA fined Facebook £50 million, which is more than 150 times the previous record of £325,000 for the same offenses.
The CMA said in a statement about the decision, “This is the first time a company has been found by the CMA to have breached a [order] by consciously refusing to report all the required information.”
Giphy is a popular animated GIF picture generator utilized by Facebook’s rivals in social networking applications, on mobile phones, and elsewhere online. As a result, there were concerns about possible competition.
The CMA issued an “initial enforcement order,” which places restrictions on how businesses that are merging but are under investigation can function. It’s meant to keep the entities semi-separate and in rivalry until the inquiry is over.
Facebook is required to give updates and information on how it is implementing the injunction.
“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, senior director of mergers at the CMA said in a statement. “This should serve as a warning to any company that thinks it is above the law.”
The tech giant said, “We strongly disagree with the CMA’s unfair decision to punish Facebook for a best-effort compliance approach, which the CMA itself ultimately approved,” the media giant said.
Concerns over a “substantial lessening of competition” prompted the authorities to begin an inquiry into the purchase of the GIF-sharing site in June of last year.
Want to know the whole story, click: https://www.bbc.com/news/technology to know more.