The United Kingdom’s anti-competitive watchdog has ordered Facebook’s parent company, Meta, to sell off the popular GIF sharing platform Giphy.
In a statement, the Competition and Markets Authority (CMA) announced that it found Facebook’s acquisition of Giphy “concerning” and harmful to competition between social media platforms. Furthermore, the CMA said that its “concerns can only be addressed by Facebook selling off Giphy in its entirety to an approved buyer”.
Giphy is one of the biggest GIF-making and sharing sites on the interest. It offers a wide range of tools to its users for creating, remixing, and sharing GIFs. In May 2020, Facebook announced that it had acquired Giphy for nearly $400 million and is planning to integrate it with Facebook and Instagram.
“People will still be able to upload GIFs; developers and API partners will continue to have the same access to GIPHY’s APIs, and GIPHY’s creative community will still be able to create great content,” Vishal Shah, Facebook’s Vice President of Produce, wrote in the announcement blog post.
However, the CMA had said that during its investigation, it found that Facebook’s acquisition of Giphy could deny or limit its access to other platforms and drive more traffic to Meta’s own social media platforms such as Instagram, Facebook, and WhatsApp. Furthermore, it also raised privacy concerns and said that Meta could force other platforms to hand over more data in order to access Giphy’s services.
“The tie-up among Facebook and Giphy has already eliminated a competitor in the display advertising market,” Stuart McIntosh, who presided the independent inquiry group that investigated Giphy’s acquisition, said in a statement. By controlling competitors’ access to Giphy GIFs, Facebook will also be able to further increase its significant market power in social media without taking any action. We are protecting social media users and promoting competition and innovation in the digital advertising industry by requiring Facebook to sell Giphy.”