UK competition watchdog orders Facebook parent firm Meta to sell gif-sharing platform Giphy over fears it would let US tech giant ‘increase its already significant market power’
- Competition and Markets Authority has blocked Facebook’s acquisition of Giphy
- The CMA has now ordered the social network to sell off the GIF-sharing platform
- The deal would let Facebook ‘increase its already significant market power’ by denying or limiting other platforms’ access to Giphy, the CMA added
- Facebook said it disagreed with the decision and is considering all its options
Britain’s competition watchdog has blocked Facebook’s acquisition of Giphy and ordered the social network to sell off the GIF-sharing platform.
The Competition and Markets Authority (CMA) said today that the deal would let Facebook ‘increase its already significant market power’ by denying or limiting other platforms’ access to Giphy GIFs and driving traffic to Facebook-owned sites.
It has noted previously that there is only one other big provider of GIFs – Google’s Tenor.
The regulator was also concerned that the deal removed potential competition from the UK’s £7billion display advertising market, of which Facebook controls half.
It is the first time the watchdog has sought to unwind a tech deal, marking an escalation by regulators seeking to tame digital giants.
Facebook, which has been renamed Meta, said it disagreed with the decision and is considering all its options, including an appeal.
The CMA has blocked Facebook’s acquisition of Giphy and ordered the social network to sell off the GIF-sharing platform
Facebook, which has rebranded itself as Meta, said it disagreed with the decision and is considering all its options, including an appeal
‘Both consumers and Giphy are better off with the support of our infrastructure, talent, and resources,’ the company said.
‘Together, Meta and Giphy would enhance Giphy’s product for the millions of people, businesses, developers and API partners in the UK and around the world who use Giphy every day, providing more choices for everyone.’
After consulting with other businesses and groups and assessing alternative solutions proposed by Facebook, the watchdog said it ‘concluded that its competition concerns can only be addressed by Facebook selling Giphy in its entirety to an approved buyer.’
Stuart McIntosh, chair of the watchdog’s independent group that carried out the investigation, said the deal ‘has already removed a potential challenger in the display advertising market.’
‘Without action, it will also allow Facebook to increase its significant market power in social media even further, through controlling competitors´ access to Giphy GIFs,’ he said.
‘By requiring Facebook to sell Giphy, we are protecting millions of social media users and promoting competition and innovation in digital advertising.’
New York-based Giphy’s library of short looping videos, or GIFs, are a popular tool for internet users sending messages or posting on social media.
Stuart McIntosh, chair of the watchdog’s independent group that carried out the investigation, said the deal ‘has already removed a potential challenger in the display advertising market.’ The Competition and Markets Authority is based in this building in London’s Canary Wharf
The two sides have waged a bitter battle over the deal, reportedly worth £300million ($400million).
The Competition and Markets Authority said in a provisional decision in August that Facebook should be forced to sell Giphy.
The social giant responded with a strongly worded letter, saying the provisional decision contained ‘fundamental errors.’
Last month, the watchdog fined Facebook £50.5million ($67.4million) for failing to provide information needed for the investigation, saying the company’s failure to comply was deliberate.
The watchdog has said that prior to the deal, Giphy had been considering expanding its advertising services to other countries, including the UK.
That would have added a new player to the market and encouraged more innovation from social media sites and advertisers, but Facebook terminated Giphy’s ad partnerships after announcing the deal, it said.
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