A German court on Tuesday fined Facebook two million euros for not being transparent enough over the action it is taking to curb online hate speech.
Under a new regulation that came in force on January 1, 2018, companies like Twitter and Facebook have 24 hours to remove posts that openly violate German law after they are flagged by users.
Offensive content that is more difficult to categorise must be deleted within seven days after it is reported and reviewed.
Social media companies that fail to comply face up to 50 million euros ($60 million) in fines.
Further, online giants are required to publish every six months a report on how they have gone about combating hate speech.
In a decision that can still be appealed by Facebook, the BfJ court levied a fine equivalent to $2.26 million as it found that the company failed to provide a complete picture about complaints made by users in its report covering January to June 2018.
"The report lists only a fraction of the complaints by users on illegal content," the court said in a statement.
It noted that Facebook offers its regular flagging mechanism as well as another channel, which the court described as "too hidden", to report offensive content under the specific German law.
While those reported under the latter are reflected in the published report, content reported under the wider flagging system is not.
"The BfJ assumes that the number of complaints received via the widely known flagging channel is considerable and that what is presented in the published report is therefore incomplete."
The US online giant said in its report that between January 1, 2018 and June 30, 2018, 1,704 items were reported by 886 users.
Some 362 items reported by 218 people ended up being deleted or blocked, according to the report.
Meanwhile, Google-owned YouTube received reports on almost 215,000 pieces of content in the same time span, while Twitter users flagged 265,000.
Of those, YouTube deleted 58,000 and Twitter 29,000.