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Facebook’s recent fine over Giphy investigation shows why Oversight Board has no power

In May of last year Facebook announced an Oversight Board with the aim of having an independent party to help guide the moral compass of the company and steer it away from any activities that would otherwise land the big tech firm in trouble.

Given what has transpired since then, such as the recent whistleblower testimony, it looks like the Oversight Board was designed for nothing more than a distraction and some good PR.

This as Facebook has been issued a fine this week by the UK’s Competition and Markets Authority (CMA) for withholding information regarding its acquisition of Giphy in 2020, with the matter currently under an antitrust investigation.

The fine amounts to £50.5 million or $70 million, which is a small slap on the wrist given the revenue the company generates.

“Facebook has been fined £50.5 million for breaching an order imposed by the CMA during its investigation into Facebook’s purchase of Giphy,” explained the UK watchdog.

“Facebook is required, as part of the process, to provide the CMA with regular updates outlining its compliance with the IEO (initial enforcement order). Facebook significantly limited the scope of those updates, despite repeated warnings from the CMA,” it added.

As TechCrunch points out, the investigation which has lasted well over a year took a turn after the CMA found compelling evidence to warrant further probing into the deal. At the time, Facebook said it would be more than willing to with with the watchdog, with a spokesperson saying that, “continue to fully cooperate with the CMA’s investigation.”

Given the nature of the fine then, full cooperation did not materialise on Facebook’s part.

“This is the first time a company has been found by the CMA to have breached an IEO by consciously refusing to report all the required information,” the organisation highlighted.

“Given the multiple warnings it gave Facebook, the CMA considers that Facebook’s failure to comply was deliberate. As a result, the CMA has issued a fine of £50 million for this major breach, which fundamentally undermined its ability to prevent, monitor and put right any issues,” it added.

Naturally Facebook has deemed the fine as unfair, citing no error on its part.

“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 told TechCrunch.

The social media platform may be crying foul over the fine, but given its history in terms of antitrust, we’re siding with the CMA on this one.

The bigger picture, however, is the company’s continued flouting of the rules and ignoring of public pressure as it soaks up fines. As such, the Oversight Board either has its hands tied or simply does not have actual oversight.

 

 

[Image – Photo by Dawid Sokołowski on Unsplash]

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