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Facebook fined £50.5m for breaching order in Giphy takeover investigation
- streamofdigits 5y agoHow many hours of ad revenue does this translate to?
- reustle 5y ago> In 2020, Facebook's advertising revenue worldwide amounted to 84.2 billion U.S. dollars = Roughly 61,196,981,000 GBP = Roughly 167,600,000 GBP per day So, roughly 8 hours?
- streamofdigits 5y agoJust another day in the life...
- deleted 5y ago[deleted]
- coz131 5y agoAcquisition was 290m pounds so 50.5m isn't that high. Probably should be in the 30% at least.
- vlovich123 5y agoIf you break your word about an acquisition, make it the cost of the purchase + 100% of any value that acquisition generated (a good rule of thumb would be ~10x the amount of money spent on supporting that BU or the total amount of revenue, whichever is higher). Seems like everyone is concerned about moral hazards for normal crimes yet white collar crimes like this are extremely underpunished to the point that you can factor that fine into your P&L.
- dane-pgp 5y ago"The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread."
- prasadjoglekar 5y agoThat price was for a global deal, not just the UK. 50.5M is likely higher than Giphy's UK revenues for a year. It does seem punitive. TFA also says that Austria fined FB ~10M for the same deal. It might all have been priced into the deal as some other comments have pointed out. If the goal is to truly deter, then the CMA should perhaps make FB unwind the deal at least in the UK.
- klelatti 5y agoIsn't the point here that they've already integrated the business - otherwise why not just comply with the disclosure requirement? Also not sure that we can measure the value to Facebook in this way. This is about strengthening Facebook's core business which is worth (just guessing) > $500bn. How much value it adds is unknown but I bet it's a lot more than the acquisition price.
- prasadjoglekar 5y agoTFA states that FB believes any disclosure and separation was on a best effort basis, and they've complied. As to the impact on the core business, you're right. However, FB is not worth $500B in the UK alone where this dispute is.
- klelatti 5y ago> Facebook said it had made its “best effort” to comply with the IEO. That's not the same as what you've said here.
- klelatti 5y agoThis is Facebook acting as though they are above the law. The next time they attempt a takeover this should be rolled out as evidence of their likely behaviour and should be grounds for blocking that takeover. If you won't play by the rules then you don't get to play at all. Edit: Someone should ask Nick Clegg, a former UK lawmaker, why it's ok to break the law in that country.
- 908087 5y agoI'd act like I was above the law if all signs pointed to me actually being above the law, too. When the fines for breaking the law are a fraction of the money you've earned doing it, continuing to do it is just a good business decision.
- deleted 5y ago[deleted]
- andylynch 5y agoAlmost certainly - it's worthing bearing in mind the CMA fined them 155x the previous record for this kind of penalty. The investigation also appears to be ongoing; I would expect the final decision to also be substantial.
- kwertyoowiyop 5y agoHow about: “acting because they are above the law”?
- 9387367 5y agopriced in
- axiosgunnar 5y agoI suggest that these newsarticles be rewritten like this: „Facebook fined 8 hours of revenue for breaching order in Giphy takeover investigation“
- acatton 5y agoI've never understood why people focus so much on revenue. "My company has a 2M$ ARR." All right, good for you, but if you're spending 2.5M$ per year to run your company, it looks like a crappy business to me... I would suggest something more like "Facebook fined 15 hours of profit for breaching order in Giphy takeover investigation"
- yunohn 5y agoOn the contrary, I don’t understand why you’re focusing on profit. It’s quite public knowledge that most companies avail accounting practices to lower profit over revenue. In fact, it’s not even a trick - investing profits back into your business is common sense.
- Sebb767 5y agoBut it's also common knowledge that there are quite a few low-margin businesses, which have insane revenue, but comparatively very low profit - general stores, for example. Think of someone living in SF and someone living somewhere in the central US in a cheap region, both earning 100k$. If you fine both of them 10k$, the latter one probably won't have a big problem, since the living costs are rather low. Someone in SF, though, will spent most of their income on rent, so this fine will hit them hard. Calling the fine 10% of their income will totally misrepresent the impact.
- ViViDboarder 5y ago> But it's also common knowledge that there are quite a few low-margin businesses, which have insane revenue, but comparatively very low profit - general stores, for example. Sure. But Facebook isn’t one of those.
- mattbee 5y ago“This should serve as a warning to any company that thinks it is above the law,” said Joel Bamford, a director of mergers at the CMA. Like some people have said - 8 hours of revenue. I think it confirms that breaking the law in the UK is excellent value for money!
- amelius 5y agoThey should lose their trademarks and domain names after three offenses.
- system16 5y ago"Pay them. In the scheme of things, it's a[nother] speeding ticket."
- kwertyoowiyop 5y agoFacebook: Places £50m bill on the nightstand. “Buy yerself sumthin’ nice.”
- znpy 5y ago£50.5m is nothing when compared to Facebook's gross earnings. It should be at least £500m.
- harles 5y agoI really wish this article had more detail. Maybe there are legal filings somewhere with them, but this leaves a lot to the imagination as to what the non-compliance was: > The regulator said Facebook significantly limited the scope of the updates it was meant to provide proving it was complying with the order despite repeated warnings.