Meta (FB), previously known as Facebook, has been slapped with a £1.5m ($2m) fine from the UK’s competition watchdog for failing to cooperate with an investigation into its $400m (£295m) takeover of Giphy.
The Competitions and Markets Authority (CMA) said on Friday that the social media platform did not alert the regulator in advance of three key staff members leaving the firm.
These individuals had previously been included on a list of key staff provided to the CMA by Meta, reflecting their importance.
Failure to report this information was a breach of initial enforcement order (IEO), under which Meta must inform the competition authority of any material changes to the business.
These IEOs prevent companies from completing a merger while it is being examined by the CMA.
It is the second time the company has been issued a penalty from the CMA. In October, it was fined £50m after it significantly limited the scope of compliance reports, despite repeated warnings.
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.”
Meta confirmed on Friday that it would pay the fine but said that it could not prevent staff from leaving the company.
“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,” a spokesperson said.
The news comes just days after the company revealed Facebook’s numbers had fallen for the first time ever amid growing competition from rival platforms such as TikTok.
On Wednesday night after US markets closed, Meta unveiled a drop in daily user numbers by 1 million to 1.929 billion over three months as it lost younger subscribers.
It added that it expected revenues to grow by just 3% in the first quarter of the year, a huge slowdown when compared to its history of constant double-digit growth.
"People have a lot of choices for how they want to spend their time, and apps like TikTok are growing very quickly," Mark Zuckerberg, co-founder and CEO, told investors.
Investors were severely jolted by the news, causing more than $230bn to be wiped off the value of the company on Thursday. The 26% slump was the largest one-day drop in value of any company in Wall Street history.
The sell-off saw chief executive Zuckerberg’s personal wealth decline by around $28bn, sending him lower down the global rankings of the world’s richest people.