Facebook Fined USD 70 Million for Intentionally Hiding Facts of Giphy Purchase

Giphy was bought by Facebook on May 15, 2020. A UK regulator penalized Facebook USD 70 million for intentionally withholding facts regarding its Giphy purchase. Even members of Congress felt Facebook’s USD 400 million deal was a terrible idea when it began in 2020. In August, UK authorities criticized the company’s interactions with the large GIF-making center, prompting the Competition and Markets Authority (CMA) to start an antitrust investigation. As part of the inquiry, the CMA imposed an Initial Enforcement Order (IEO) prohibiting any further merging between Facebook as well as Giphy, allowing the firms to compete as if there had been no purchase.

Giphy is a database as well as a search engine based in the United States that allows users to find and share short looping films without audio that resemble animated GIF files. As per a CMA news statement, after receiving multiple warnings, Facebook failed to give the needed updates on its adherence with the IEO. According to the CMA, Facebook violated the IEO by “intentionally refusing to submit all relevant information,” which resulted in a USD 70 million penalization. This is in addition to a £500,000 (USD 700,000) fine imposed by Facebook for changing its Chief Compliance Officer twice without approval.

This regulatory action comes at a period in which Facebook CEO Mark Zuckerberg has been under constant criticism for the organization’s monopolistic trade practices. According to the CMA, this is the very first time it has punished a firm for such a premeditated breach. “This should serve as a wake-up call to any firm that believes it is above legislation,” said Joel Bamford, senior director of mergers at the CMA. The CMA also mentioned in the press statement that its assessment is underway and “no conclusion has yet been taken regarding the acquisition.” Facebook’s dubious behavior, both in the past as well as the present, has earned the company a lot of negative press. That’s most likely why CEO Mark Zuckerberg intends to rebrand the firm and disappear into his Metaverse.