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Facebook charged millions of dollars by United Kingdom’s CMA for breaching an order imposed by them

One occurrence that is not new for Facebook is fighting off allegations, being called in courts, and paying up hefty sums for reconciliations. This time too, the tech giant has winded up in a new scandal, or case as we may call it. However, more than the opposing party, its Facebook itself who is at fault.

Facebook, last year in 2020, collaborated with a company called Giphy. It happens to be the largest company which creates Gifs and memes. While Facebook is always collaborating and acquiring other firms, this recent acquisition was specifically called out by United Kingdom’s Competition and Market Authority (CMA).

The reason for this call out was because CMA believed that this new collaboration by Facebook with Giphy, will put the tech giant on the higher pedestrian and hence will eliminate market competition. By market competition it means that other application will not be able to get the same level of reach and other sort of options, which will hence be a problem.

However, Facebook denied any such aspects and stated that the collaboration will not affect the growing competition in the market and Facebook will not become a monopolist network as many claim. However, in order to investigate the collaboration and its affects more prominently and deeply, CMA had issued an IEO for the tech giant. An IEO meant that Facebook could not go further with the collaboration and had to give regular update in its compliance with the IEO.

While Facebook believed that an IEO was an unnecessary addition to the collaboration, CMA stated that it is a common effort which is imposed to make sure a strong and equal working in the market. CMA hence asked Facebook to give them regular updates, however, the tech giant failed to do so.

CMA realized on many occasions that Facebook was sharing half of the information and it warned the tech giant many times about it too. Eventually when the tech giant failed to understand the warning, CMA charged it of £50.5 million which equates to $69.1 million.

The charge was also made, because Facebook changed its Chief Compliance Officer twice in between the investigation without discussing it with the CMA.

The tech giant upon the charges has stated that they believe that the CMA’s decision was unnecessary and unfair and they could have been other ways to take up the investigation. However, CMA believes that IEO is a standard practice and nothing was done wrong.

What are your thoughts on this?

Creator: SOPA Images | Credit: SOPA Images/LightRocket via Getty Images

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