Meta fined for second time by watchdog for enforcement order breaches

Facebook’s parent company Meta has been fined for a second time by the Competition and Markets Authority (CMA) for breaching an initial enforcement order from the watchdog.

The CMA said it had fined Meta £1.5 million after it failed to alert the regulator in advance of key staff leaving the company while an investigation into a merger is taking place.

The CMA launched an investigation into Meta’s proposed purchase of GIF-sharing platform Giphy in June 2020.

The technology giant said it was “disappointed” by the decision and called the fine “problematic” because it said it related to the “voluntary departure of US-based employees”.

It is standard practice for the CMA to issue an initial enforcement order at the start of an investigation into a completed merger as they are designed to make sure the companies involved continue to compete with one another as they would have before the deal took place, and also prevents the companies from integrating further while a merger review is under way.

It is the second time Meta has been fined for breaching an initial enforcement order – in October 2021, the tech giant was fined more than £50 million by the CMA for significantly limiting the scope of compliance reports which were a part of the watchdog’s investigation into the Giphy purchase.

The CMA has since ruled that Meta’s purchase of Giphy could harm social media users and UK advertisers, and has told Meta to sell Giphy in its entirety.

Explaining the latest fine, Joel Bamford, senior director of mergers at the CMA, said: “Meta failed to alert us in advance to important changes in their staff, despite knowing they were legally required to do so. This is not the first time this has happened.

“Initial enforcement orders are an integral part of our mergers toolkit and ensure the CMA is able to take effective action if we find competition concerns.

“Breaches like this one threaten our ability to maintain the benefits of competition for people using these products and services.”

In response, a Meta spokesperson said: “We are disappointed by the CMA’s decision to fine us because of the voluntary departure of US-based employees.

“We intend to pay the fine, but it is problematic that the CMA can take decisions that could directly impact the rights of our US employees protected under US law.”