London, February 7: The UK Competition and Markets Authority (CMA) has fined Meta (formerly Facebook) $2 million for failing to disclose key changes regarding its $315 million acquisition of online database and search engine Giphy.

According to the CMA, Meta failed to notify the regulator about the resignation of three key employees and the reallocation of their roles. In November, the UK anti-trust watchdog had ordered Meta to sell Giphy, as the acquisition could harm social media users and UK advertisers. Facebook had moved to buy the online GIF platform in May 2020.

The UK anti-competition watchdog had ruled that Facebook's acquisition of Giphy would reduce competition between social media platforms and that the deal has already removed Giphy as a potential challenger in the display advertising market.

"The tie-up between Facebook and Giphy has already removed a potential challenger in the display advertising market. Without action, it will also allow Facebook to increase its significant market power in social media even further, through controlling competitors' access to Giphy GIFs," said Stuart McIntosh, Chair of the independent inquiry group. Facebook Parent Company Meta Stock Prices Crash, $200 Billion Wiped Off After Report On User Growth.

"By requiring Facebook to sell Giphy, we are protecting millions of social media users and promoting competition and innovation in digital advertising," he had said in a statement.

Before the merger, Giphy had launched innovative advertising services which it was considering expanding to countries outside the US, including the UK. Giphy's services allowed companies, such as Dunkin' Donuts and Pepsi, to promote their brands through visual images and GIFs. The CMA found that Giphy's advertising services had the potential to compete with Facebook's own display advertising services.

(The above story first appeared on LatestLY on Feb 07, 2022 12:53 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).