by Charley Connor / 4Feb 22 / the Global Competition Review (GCR)
The UK’s Competition and Markets Authority has fined Meta £1.5 million for failing to alert the agency about the departures of three key US staff during an in-depth review into its Giphy acquisition, which Meta claims could interfere with its employees’ rights under US labour law.
The CMA today issued its second penalty to Facebook’s parent company for breaching the initial enforcement order imposed on it as the authority reviewed – and ultimately blocked – its already-completed acquisition of Giphy.
The order in part required Meta to inform the authority in advance of any “material changes” to its business. That included resignations of key staff named on a list drawn up by the CMA and seeking the agency’s prior consent before rehiring or redistributing responsibilities.
But Meta failed to comply with each of these requirements after three “key employees” resigned and the company reallocated their roles, the enforcer said today.
It added that Meta had also failed to properly inform it of staff changes “multiple times” in 2021.
Sarah Long was quoted, saying “the CMA’s initial enforcement orders can come down like a sledgehammer on a business under investigation. The scope of any such order can be “draconian” and is not limited to those parts of the business that cause a competition issue. Importantly, any derogation from an initial enforcement order must be negotiated with the CMA on an individual basis, which can take time and require significant interactions with the purchaser’s counsel. Companies therefore have no option other than to take an IEO seriously. Otherwise, as we have seen, the financial penalties for breaching an IEO can be severe.”
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