It is the latest bad news for Meta, which reported weak results this week showing that its number of active users were declining for the first ever time. The ensuing drop in the value of the company was the largest in stock market history, wiping $200 billion from the value of the company and drastically reducing chief executive Mark Zuckerberg’s net worth.
The Competition and Markets Authority (CMA) will fine Meta £1.5 million because it did not tell the regulator about important changes happening at the company, the regulator said.
The CMA had issued an enforcement order on Meta, as part of an investigation into its purchase of Giphy. It requires that Meta tells the CMA about any “material changes” to the business, so that it can track how the two companies interact with each other after the deal takes place.
It said that Meta had failed to tell the CMA about the resignation of three “key employees”, and the reallocation of their roles. That had happened numerous times in 2021 already, 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.”
Meta has already been fined for breaching the same order. In October 2021, it was required to pay a much larger sum – £50 million – after the CMA said it was failing to give enough detail in reports that are intended to give the regulator oversight of what the company is doing.
In the time since the order was issued, the CMA has released its final decision into Meta’s purchase of Giphy. It required that Meta fully sell Giphy, after finding that the deal could cause harm to social media users and advertisers.
Meta said in a statement that it would pay the fine, though indicated that it disagreed with the way the decision had been made.
“We are disappointed by the CMA’s decision to fine us because of the voluntary departure of US-based employees,” a spokesperson said. “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.”
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