The British regulator prescribes that Facebook must sell Giphy due to monopoly concerns

Last year, Facebook announced its plans to buy the popular GIF service Gifhy in a contract worth about $ 400 million. While Facebook (now Meta) said that its goal with the acquisition of Giphy was to deeply integrate the service with Instagram, regulators have now ordered Facebook to sell Giphy due to monopoly concerns …

In a press release, the British Competition and Markets Authority said its investigation concluded that “Facebook’s purchase of Giphy would reduce competition between social media platforms and that the agreement has already removed Giphy as a potential challenger in the on-screen advertising market.”

According to the CMA, the agreement would allow Facebook to “increase its already significant market power” as follows:

  • denying or restricting access to other platforms by Giphy GIFs, directing more traffic to Facebook-owned sites – Facebook, WhatsApp and Instagram – which already make up 73% of the time users spend on social networks in the UK, or
  • by changing access conditions, for example, by requiring TikTok, Twitter, and Snapchat to submit more user data to access Giphy GIFs.

One of the focuses of the investigation was “how the business will affect the screen advertising market.”

The CMA has found that Giphy’s advertising services have the potential to compete with Facebook’s own on-screen advertising services. They would also encourage greater innovation by others in the marketplace, including social media sites and advertisers. Facebook cut off Giphy’s advertising services at the time of the merger, removing an important source of potential competition.

Finally, the CMA concludes that these concerns “can only be resolved by Facebook selling Giphy in its entirety to an approved customer.” You can read all the details here.

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Naveen Kumar

Friendly communicator. Music maven. Explorer. Pop culture trailblazer. Social media practitioner.

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