What you need to know
- Facebook parent company Meta is being forced to sell Giphy.
- The UK's Competition and Market Authority says the acquisition could allow Facebook to significantly increase its market power in social media.
- Specifically by denying access to GIFs on platforms that aren't owned by Facebook.
The UK's Competition and Markets Authority has ordered Facebook parent company, Meta, to sell Giphy.
The CMA stated today:
In line with its Phase 2 provisional findings issued in August, the Competition and Markets Authority (CMA) has today concluded that Facebook's acquisition of Giphy would reduce competition between social media platforms and that the deal has already removed Giphy as a potential challenger in the display advertising market.
The CMA says a review of the merger concluded Facebook would "be able to increase its already significant market power in relation to other social media platforms" by denying access to Giphy GIFs on other platforms, driving traffic to Facebook, WhatsApp, and Instagram, and by changing terms of access for platforms like TikTok, Twitter, and Snapchat that could have seen those sites forced to hand over more data in order to use Giphy GIFs.
The CMA also found that Giphy's advertising could compete with Facebook's own display advertising and that by terminating this at the time of the merger Facebook removed "an important source of potential competition."
The CMA has already fined Meta some £50 million over the merger and has now ordered Giphy be sold in its entirety. A Meta spokesperson told The Guardian:
"We disagree with this decision. We are reviewing the decision and considering all options, including appeal. Both consumers and Giphy are better off with the support of our infrastructure, talent, and resources. Together, Meta and Giphy would enhance Giphy's product for the millions of people, businesses, developers and partners in the UK and around the world who use Giphy every day, providing more choices for everyone."