Problem was of social network s own making, says unimpressed judge
Gareth Corfield Fri 14 May 2021 // 16:29 UTC Share
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Facebook has failed to neutralise an order from Britain s competition regulator freezing its buyout of Giphy after having sat on its hands and failed to answer questions, the Court of Appeal has found.
Judge Sir Geoffrey Vos said the central problem in this case was entirely of Facebook s own making as he dismissed its attempt to overturn an Initial Enforcement Order (IEO) made by Britain s Competition and Markets Authority (CMA) last year.
That IEO blocked the Mark Zuckerberg-owned social network from finishing off its $400m buyout of Giphy, a supplier of web tracking beacons cunningly disguised as funny little animated images used to spice up online chats and comment sections.
The watchdog ordered Facebook and Giphy to keep their businesses separate, not to integrate their IT systems or customers lists, and not to exchange sensitive information during the course of the investigation.
Facebook asked the CMA to vary that order so it only applied to the tech giant’s business “insofar as it related to the supply or procurement of gifs”.
The tech giant claimed that the initial enforcement order (IEO) was disproportionate as it applied “across hundreds of businesses and more than 50,000 employees worldwide”.
It also said that it would not prevent the CMA ordering the company to sell Giphy, if the regulator decided that was necessary to preserve competition in the market.
CMA welcomes Court judgment in Facebook and Giphy case
The CMA has today welcomed the Court of Appeal’s decision to dismiss all 4 of Facebook’s grounds of appeal in a key case on how companies engage with the CMA.
From:
13 May 2021
The Court of Appeal criticised Facebook’s conduct, saying the “central problem in this case was entirely of Facebook’s own making”, and agreeing with the Tribunal’s finding that the company “sat on its hands” and “did not properly engage” with the Competition and Markets Authority (CMA) following its derogation request.
CMA Chief Executive Andrea Coscelli said:
The watchdog ordered Facebook and Giphy to keep their businesses separate, not to integrate their IT systems or customers lists, and not to exchange sensitive information during the course of the investigation.
Facebook asked the CMA to vary that order so it only applied to the tech giant’s business “insofar as it related to the supply or procurement of gifs”.
The tech giant claimed that the initial enforcement order (IEO) was disproportionate as it applied “across hundreds of businesses and more than 50,000 employees worldwide”.
It also said that it would not prevent the CMA ordering the company to sell Giphy, if the regulator decided that was necessary to preserve competition in the market.
The watchdog ordered Facebook and Giphy to keep their businesses separate, not to integrate their IT systems or customers lists, and not to exchange sensitive information during the course of the investigation.
Facebook asked the CMA to vary that order so it only applied to the tech giant’s business “insofar as it related to the supply or procurement of gifs”.
The tech giant claimed that the initial enforcement order (IEO) was disproportionate as it applied “across hundreds of businesses and more than 50,000 employees worldwide”.
It also said that it would not prevent the CMA ordering the company to sell Giphy, if the regulator decided that was necessary to preserve competition in the market.