Kirlian Photography, a UK-based online photo-sharing website, has been fined £200,000 after being found guilty of making fake child photographs.
The company had been fined by the European Commission for misleading customers about the quality of its services.
The fine is to be paid in full by Kirlians parent company, Kirlia.
The UK’s Competition and Markets Authority said the company had engaged in conduct that breached EU consumer law.
It said the alleged breaches included failing to disclose that it had no official affiliation with any child-care centre, and failing to comply with the requirements of the UK’s Child Protection Act.
It also alleged that the company’s services were not available in all EU countries.
Kirlias parent company has been accused of misleading customers regarding the quality and availability of its service.
The commission found that the website had engaged “in conduct that breaches EU consumer rights, including by failing to provide a full and accurate picture of the quality or availability of the services provided”.
The company has also been accused by an EU court of misleading its customers regarding its own policies and procedures for collecting data on the content of images.
Kudos for honesty, not for a business model article K.D. Kirthy, managing director of Kirlians parent company said the allegations were a serious violation of consumer law and that the penalties should be enforced.
“The Commission has made it clear that it will not tolerate any conduct that is dishonest or misleading,” he said.
“We would like to express our heartfelt gratitude to the authorities in the UK and the EU for their support in the investigation.
We hope that the fine will help to deter others from engaging in the same kind of behaviour.”
The company said it would continue to work with regulators in other EU countries to comply.
The court said it was satisfied that Kirlis parent company was in breach of EU consumer laws and that Kirthys practices were “reckless and deceptive”.
Kirla’s parent company had denied the charges.
K.J. Kirtland, the company executive in charge of the investigation, said the fines would deter others who would be tempted to follow Kirliakys lead.
“I have no doubt that the Commission will apply its resources and will use its powers to bring the perpetrators of these serious breaches of consumer rights to justice,” he added.
The charges against Kirliae are the second time the UK has found a parent company guilty of failing to meet standards for its services, and the first to be handed down by a European court.
The Kirliamartis parent has said it will appeal the verdict.