Meta Faces $6.8 Million Penalty in Israel for Violating Regulations

Mark Zuckerberg’s Meta Platforms, Inc., the world's leading social networking giant with a market cap of $1.2 trillion, has agreed to pay 25 million shekels ($6.8 million) to Israel's State Treasury. This settlement follows violations of Israel’s Economic Competition Law during the acquisitions of two Israeli companies, RedKix, Inc. in 2018 and Service Friend Ltd. in 2019.

The Israel Competition Authority (ICA) revealed that Meta, through its Facebook arm, failed to obtain the necessary consent for these transactions. According to the ICA, any company classified as a "monopolist"—defined as having a market share in Israel exceeding 50%—must report and obtain approval from the ICA director general before proceeding with mergers or acquisitions. Facebook, however, did not comply with this requirement.

RedKix, known for merging email with collaboration tools, and Service Friend, which develops AI bots for messaging apps to enhance customer service, were acquired without the mandated consent, triggering the ICA's investigation.

The ICA's findings underscored Facebook’s obligation to report the transactions, given its significant market presence in Israel. In light of these violations, the Competition Authority’s Tribunal endorsed the settlement, noting, "Handling this type of defect by paying an amount to the State Treasury is a proper course. Since it is done by agreement and the amount is relatively high, it seems that it should be approved."

This settlement marks a significant enforcement of Israel’s competition laws, emphasizing the importance of regulatory compliance for global tech giants operating within the country. It also reinforces Israel's commitment to maintaining a fair and competitive market environment.

Israel continues to stand as a hub of innovation and strict regulatory standards, ensuring that all entities, regardless of their global stature, adhere to local laws and regulations.

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