Facebook fined a record £50m by UK competition watchdog

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Facebook has been fined £50.5m ($70m) by the UK’s Competition and Markets Authority (CMA), which accuses it of deliberately breaking rules.

The case related to Facebook’s 2020 acquisition of Gif-sharing service Giphy, which is under investigation.

The CMA said Facebook had not provided information, ignored many warnings, and committed a “major breach”. The firm denies deliberately breaking rules.

There are also reports that its parent company might change its name.

Tech news site The Verge revealed the news about the firm – which owns the Facebook service itself, as well as WhatsApp, Instagram, Oculus VR, and other brands.


‘Deliberate’ failure

The £50m fine the CMA handed Facebook is more than 150 times higher than the previous record handed down for similar offences, at £325,000.

Speaking about its decision to fine the social media giant, the CMA said in a statement: “This is the first time a company has been found by the CMA to have breached an [order] by consciously refusing to report all the required information.”

Giphy is widely used by Facebook’s competitors to power animated Gif images used in social media apps, on mobile keyboards, and elsewhere online. That led to potential competition concerns.

The CMA issued something called an “initial enforcement order”, which limits how companies that are merging, but under investigation, operate. It is designed to keep the entities semi-separate and in competition with each other until the investigation is over.

Facebook is obliged to provide updates and information to make clear how it is complying with the order.

“Given the multiple warnings it gave Facebook, the CMA considers that Facebook’s failure to comply was deliberate,” the CMA said.

That “fundamentally undermined its ability to prevent, monitor and put right any issues”.

The fine for that offence is £50m. Separately, the CMA announced a £500,000 fine for Facebook changing its chief compliance officer – twice – “without seeking consent first”.

Facebook refutes the allegation that it deliberately broke rules, saying it had complied with the main obligations, and the row is instead about the details of how it did so.

“We strongly disagree with the CMA’s unfair decision to punish Facebook for a best effort compliance approach, which the CMA itself ultimately approved. We will review the CMA’s decision and consider our options,” a spokesperson said.


More than Facebook

The Verge’s report saying that Facebook plans to rebrand next week suggested that the new name will reflect Facebook’s ambition to build the metaverse – the next version of the internet – rather than its traditional social media site roots.

Earlier this week, the company announced it plans to hire 10,000 employees in the European Union to do just that.

The company’s annual Connect conference, scheduled for 28 October, may provide the backdrop for such an announcement.

It also comes after weeks of news stories about Facebook’s alleged shortcomings, fuelled by internal leaks by whistleblower Frances Haugen, who gave evidence to the US Congress.

Asked about the potential name change, a Facebook spokesperson said: “We don’t comment on rumour or speculation.”


A Facebook name change would actually make a lot of sense.

When Facebook started out, there was no real distinction between Facebook the platform and Facebook the company.

But as Facebook has snapped up companies like Instagram and WhatsApp, the name has become confusing.

And with the number of people who actually use Facebook declining in many countries in the West, it’s likely the name will become increasingly divorced from the growth areas of the company.

That said, it’s hard to fathom why Facebook would think now is a good time to change its name.

Facebook is currently in a whirlwind of negative press attention over leaks from whistleblower Frances Haugen.

Rather than simply apologise, as Facebook often does, it has adopted a different media strategy.

The social network has come out guns blazing, rejecting Ms Haugen’s testimony, and claiming both her and the media have misrepresented the documents she leaked.

Changing the company’s name, at this point, would seem like it is doing so because the brand is toxic.

Perhaps Facebook has decided to change tack, or this was something planned for a while, or they feel they’ve been left with little option?

Perhaps the story isn’t true?

Whatever the truth, by not denying this story, Facebook has fuelled speculation that the company is in crisis mode.


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