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In brief: The United Kingdom’s Competition and Markets Authority (CMA) has ordered Facebook parent company Meta to jettison Giphy, the search engine for GIFs it acquired in mid-May for a reported $315 million. According to the review board, the only solution to its competition concerns is for Facebook to sell Giphy “to an approved buyer.”
In line with its initial findings from August, the CMA has concluded that Facebook’s acquisition of Giphy could hinder competition between various social media platforms.
Specifically, the review panel believes Facebook could deny or limit other platforms’ access to Giphy GIFs to drive more traffic to its own properties, including Facebook, Instagram and WhatsApp. The panel was also concerned that Facebook could tweak Giphy’s terms of service to force rivals like Twitter, TikTok or Snapchat to provide more user data in order to continue to access the service.
We’ve directed #Facebook to sell Giphy after finding the takeover could reduce competition between social media platforms and increase Facebook’s already significant market power. pic.twitter.com/yRaPxMR43z— Competition & Markets Authority (@CMAgovUK) November 30, 2021
What’s more, the CMA said the deal has “already removed Giphy as a potential challenger in the display advertising market.”
The review board also noted how Giphy had launched “innovative” advertising services and was considering expanding to other countries outside of the US, including the UK, before the acquisition. When Facebook bought the service, it shut down Giphy’s advertising business, eliminating an avenue of potential competition.
Robin Koch, Meta’s EU director of policy communications, told The Verge that they are considering all options at this stage, including an appeal. "Both consumers and Giphy are better off with the support of our infrastructure, talent, and resources," Koch added.