Britain's competition watchdog fines Facebook's owner Meta £1.5million
Britain’s competition watchdog fines Facebook’s owner Meta £1.5million after it failed to say in advance that three key staff were leaving while probe into Giphy purchase continues
- Meta is fined for second time by CMA for breaching initial enforcement order
- CMA fined Meta after it failed to alert regulator in advance of key staff leaving
- It launched probe into Meta’s proposed purchase of GIF-sharing platform Giphy
- Tech giant was also fined more than £50m in October 2021 for separate breach
Facebook’s parent company Meta was today fined for a second time by Britain’s competition watchdog for breaching an initial enforcement order.
Meta was fined £1.5million after it failed to alert the UK regulator in advance of three key staff leaving the firm in the US while a probe into a merger is taking place.
The London-based Competition and Markets Authority launched an investigation into Meta’s proposed purchase of GIF-sharing platform Giphy in June 2020.
Meta said it was ‘disappointed’ by the decision to fine the company and called it ‘problematic’ because 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 a probe into a completed merger. They are designed to make sure the companies involved continue to compete with one another as they would have before the deal.
The order also prevents the companies from integrating further while a merger review is under way. Meta was also fined for breaching an initial enforcement order in October 2021, when the CMA ordered it to pay more than £50million.
The first fine was because Meta had significantly limited the scope of compliance reports which were a part of the watchdog’s investigation into the Giphy purchase.
Mark Zuckerberg’s fortune stood at around £68billion last night after shares in Meta tumbled
The Competition and Markets Authority has 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
Joel Bamford, senior director of mergers at the Competition and Markets Authority, said today that Meta ‘failed to alert us in advance to important changes in their staff’
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.
Mark Zuckerberg’s plummets by £23billion as Meta shares plunge
Mark Zuckerberg’s wealth plunged by as much as £23billion after shares in the company that owns Facebook plummeted.
It was among the biggest drops in fortune ever seen in a single day.
Meta – which also owns Instagram and Whatsapp – saw its share price fall by around 26 per cent in after it recorded its first ever drop in daily active Facebook users. The mammoth fall was the worst single-day wipeout for a US company in history.
Mr Zuckerberg’s fortune stood at around £68billion last night after the tumble. The loss bumped him out of a list of the world’s top 10 richest people compiled by the Bloomberg Billionaires’ Index for the first time in 2015.
Elon Musk is the world’s richest man, according to the index, with a fortune of around £170billion.
On Wednesday night Meta reported that the number of daily active users fell to 1.92billion in the final three months of 2021 – down from 1.93billion in the previous quarter.
It warned that advertisers on its platforms were having to cut their budgets because of surging inflation and supply chain disruption.
And, in a dismal forecast, the company said sales in early 2022 would miss Wall Street forecasts.
‘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 spokesman 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.’
MailOnline understands that Meta is frustrated at the fine because under US ‘at will’ labour laws, staff can typically resign without notice.
This means that Meta is legally unable to prevent an employee from leaving the company at any time, at their desire – although as a matter of practice, most employees provide two weeks’ notice, but are not obligated to do so.
Bosses at Meta also believe that it was ‘unintended human error’ which resulted in a short delay in informing the CMA of the departure of the three staff, each of whom are said to have left within two weeks of handing in their notice.
Meta is also thought to believe that its initial enforcement order compliance team brought the changes to the CMA’s attention as soon as they were aware, within days of their departure.
Furthermore, the company is also said to feel that it informed the CMA that the responsibilities of the outgoing staff had been assumed by well-qualified others.
However, the announcement marks a new deterioration in relations between the US tech giant and the UK regulator.
It comes on a torrid week for Meta that saw Mark Zuckerberg’s wealth plunge by as much as £23billion after shares in the company plummeted. It was among the biggest drops in fortune ever seen in a single day.
Meta – which also owns Instagram and Whatsapp – saw its share price fall by around 26 per cent in after it recorded its first ever drop in daily active Facebook users.
Mark Zuckerberg’s wealth plunged by £23billion after shares in Meta plummeted yesterday
The Competition and Markets Authority is based in this building in London’s Canary Wharf
The mammoth fall was the worst single-day wipeout for a US company in history. Mr Zuckerberg’s fortune stood at around £68billion last night after the tumble.
The loss bumped him out of a list of the world’s top 10 richest people compiled by the Bloomberg Billionaires’ Index for the first time in 2015. Elon Musk is the world’s richest man, according to the index, with a fortune of around £170billion.
Mr Zuckerberg shot to fame and fortune after developing the social network Facebook while in his dorm room at Harvard. The 37-year-old shot recently rebranded the company – which was previously known as Facebook – to Meta to reflect its foray into what Mr Zuckerberg calls ‘the Metaverse’.
This is a network of 3D virtual worlds where people can socialise using headsets. It is still at an early stage of development but has already been tarred with horror stories from women who say their avatars in the Metaverse were subjected to sexual harassment and assault.
On Wednesday night Meta reported that the number of daily active users fell to 1.92bn in the final three months of 2021 – down from 1.93bn in the previous quarter.
It warned that advertisers on its platforms were having to cut their budgets because of surging inflation and supply chain disruption. And, in a dismal forecast, the company said sales in early 2022 would miss Wall Street forecasts.
It also revealed it has ploughed more than £7billion into the Metaverse since launching it in 2019. Mr Zuckerberg said he expects that to turn around this year. The father-of-two has been married to Priscilla Chan since 2012.
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