Meta has been fined £1.5m after it failed to tell the CMA before key staff left the company The CMA’s initial enforcement order requires Meta to give it prior notification.
It is standard practice for the CMA to issue an initial enforcement order at the start of an investigation into a completed merger. This aims to ensure that the companies involved continue to compete with one another as they would have before the deal took place. It also has the aim of preventing the companies concerned from integrating further while a merger review is underway. The CMA imposed an initial enforcement order on Meta in June 2020 in relation to its purchase of Giphy.
The order required Meta to actively inform the CMA about any ‘material changes’ to the business, including resignations of key staff, and then seek prior consent before rehiring or redistributing responsibilities. Meta failed on both accounts following the resignation of three key employees and the reallocation of their roles. The three individuals had previously been included on a list of key staff provided to the CMA by Meta, reflecting their importance.
This is not the first time Meta failed to inform the CMA of staff changes at the appropriate time, having failed to do so multiple times in 2021.
When issuing fines, the CMA takes into account the nature and gravity of the breach in question and calculates an appropriate amount accordingly.
This is the second time the CMA has issued Meta with a penalty for breaching its initial enforcement order. In October 2021, it fined Meta over £50 million after it significantly limited the scope of compliance reports, despite repeated warnings from the CMA. The reports were crucial to ensuring the CMA had oversight of the companies’ behaviour, including whether Meta had been taking any action which might prejudice the outcome of its investigation.
The CMA issued its final decision in relation to the Meta and Giphy merger on 30 November 2021. This required Meta to sell Giphy in its entirety after finding the deal could harm social media users and UK advertisers.
