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Facebook fined peanuts after Giphy staff quit and firm didn't tell UK competition regulators
£1.5m fine is 0.005% of social network's profits
British competition regulators have again fined Facebook, this time 0.005 per cent of its annual profits, for ignoring them – a move that's bound to have CEO Mark Zuckerberg sobbing for mercy.
The Competition and Markets Authority (CMA) first locked horns with Facebook in 2020, when it demanded more information on the company's proposed $400m buy of Giphy. The sale was subsequently denied clearance last last year.
The latest £1.5m ($2.03m) fine was imposed after three key staffers left Giphy. The CMA had imposed a legal order on Facebook owner Meta (2021 profit: $39bn) forcing the US giant to reveal if any "staff in positions of executive or managerial responsibility and/or whose performance affects the viability of the business" resigned.
Referring to the tiny sum in a summary issued today [PDF], the CMA said: "It is not anomalous, nor would it affect Meta materially." It is difficult to see what a non-material fine is supposed to achieve.
Facebook also ignored the CMA's initial enforcement order [PDF] by hiring replacement staff, instead of asking the regulator's permission first as the order required. A CMA representative would not identify the staffers or their job titles but said the list was of persons with managerial responsibility for the business.
It appears Facebook is treating the CMA's repeated fines over its Giphy buyout as a cost of doing business rather than something to pay attention to. Last year the regulator fined Facebook £50m for deliberately failing to cooperate with its merger probe.
A few weeks later the CMA announced it would not approve the merger, saying it would harm the display advertising market by lessening competition.
- UK competition regulator to Meta's Facebook: Sell Giphy, we will not approve the purchase
- Facebook fined £50m in UK for 'conscious' refusal to report info and 'deliberate failure to comply' during Giphy acquisition probe
- Facebook's Giphy slurp remains on hold after UK competition regulator demands more info
- Search 'middle finger' on Giphy: Basically Facebook's response to UK competition concerns over merger
Last summer Facebook flipped the bird at the CMA for daring to stick its oar into the $400m Giphy buyout, saying the regulator had made "fundamental errors" when it said the acquisition would "harm competition between social media platforms."
Giphy is a platform that hosts GIFs, the animated images. It is integrated into a number of social (and professional) media platforms. Although many of its GIFs are harmless seconds-long clips of cartoons or TV shows, it has a large number of deals inked with brands for using their content – and for getting either snippets from upcoming films or brands' logos in front of its audience of around 200 million annual users.
While the CMA's symbolic fine won't leave Facebook/Meta owner Mark Zuckerberg in tears, his company's share price crashing and wiping $232bn off its value might have made him sit up and pay attention. ®