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Facebook faces Israel fine for buying companies without consent

FILE PHOTO: FILE PHOTO: A 3D-printed Facebook logo is seen placed on a keyboard in this illustration

JERUSALEM (Reuters) -Israel’s Competition Authority said on Tuesday it was considering imposing a fine of about 6 million shekels ($1.8 million) on Facebook and its Israeli unit for buying two Israeli companies without the agency’s consent.

It said the fine is subject to a hearing and Facebook has the right to submit its arguments to the authority’s director general Michal Halperin within 60 days.

The authority said it sent a hearing letter to Facebook after it found the social media giant purchased two Israeli companies — RedKix Inc in 2018 and Service Friend Ltd in 2019 — without approval and contrary to Israel’s Economic Competition Law.

“Facebook was obliged to report the transactions required the director general’s consent since Facebook is a ‘monopolist’, whose market share in Israel exceeds 50%, the authority said.

Under the law, an entity which holds 50% or more in any relevant market is required to obtain the director general’s consent before making any transaction that constitutes a “merger of companies”, it noted.

The authority said Facebook, together with Instagram, is considered a monopoly in the market of social networks in Israel.

Facebook Israel denied any wrongdoing and said in a statement it was cooperating fully with the competition authority’s inquiry.

“We will respond to the authority’s preliminary claims to demonstrate that they are without merit or foundation,” it said. “There was no reporting obligation in relation to these transactions and we believe that the authority will reach the right conclusion.”

($1 = 3.2687 shekels)

(Reporting by Steven Scheer; editing by Louise Heavens and Jason Neely)

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