He said the breach could have been a disaster for the cricket board.
Notably, England dropped Archer from the XI hours before the second Test against West Indies, following the breach.
Here is what Giles said.
"This could have been a disaster. The ripple effect this could have had through the whole summer could have cost us tens of millions of pounds. The potential knock-on effect I don't think he could have understood," Giles told reporters.
Although ECB did not state the nature of violation, media reports suggested the 25-year-old took an exit from the bio-secure bubble and visited his flat in Brighton following the series opener at the Ageas Bowl.
However, Archer apologized later on.
Archer was advised to commence his self-isolation period of five days, besides undergoing two coronavirus tests.
The tests need to be negative before his isolation period is lifted.
"He's got five days stuck in a hotel room, so we've got to make sure he's alright from a well-being point of view, that we look after him," England coach Chris Silverwood had said.
The players and staff have been told to wear a GPS tracking device throughout the series, however, these are only activated at the venues. After the completion of first Test, the players travelled individually from Southampton to Manchester with a scheduled stop.
His isolation period will last by the time the ongoing Test at Old Trafford concludes.
This makes his participation in the third Test uncertain.
"There will be a disciplinary process to go through. That's an employment matter and we'll settle that in good time," Giles concluded.
England racked up 207/3 after West Indies put them into bat on Day 1 of the second Test.
Opener Dominic Sibley yet again stood out, having scored an unbeaten 86.
All-rounder Ben Stokes too remained unbeaten on 59 at stumps.
The duo added 126 runs for the fourth wicket.
Meanwhile, the visitors will aim to draw first blood on Day 2.
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