Facebook Owner Meta Asked by UK Competition Watchdog to Sell Giphy

“The tie-up between Facebook and Giphy has already removed a potential challenger,” said an chair of an independent investigation on Facebook-Giphy.

By Reuters | Updated: 1 December 2021 11:10 IST

Facebook Owner Meta Asked by UK Competition Watchdog to Sell Giphy

CMA said that by requiring Facebook to sell Giphy, it is protecting millions of social media users

Highlights

Facebook was recently rebranded as Meta Platforms
Facebook said it disagreed with the decision
Another major provider of GIFs is Google's Tenor

Facebook owner Meta has been told by the UK competition watchdog to sell popular animated images platform Giphy in Britain's first such move against so-called Big Tech in its efforts to bolster regulation of the sector.

The Competition and Markets Authority (CMA) said it had found that last year's acquisition of Giphy would reduce competition between social media platforms and in display advertising.

Facebook, which was recently rebranded as Meta Platforms, said it could appeal against the CMA's decision. It has four weeks to appeal.

Facebook Fined Over GBP 50 Million by British Regulator: Here’s Why

"The tie-up between Facebook and Giphy has already removed a potential challenger in the display advertising market," said Stuart McIntosh, chair of the independent investigation on Facebook-Giphy for the CMA.

"By requiring Facebook to sell Giphy, we are protecting millions of social media users and promoting competition and innovation in digital advertising."

Facebook said it disagreed with the decision.

"We are reviewing the decision and considering all options, including appeal," a Meta spokesperson said in a statement.

Facebook Questions British Watchdog's Authority to Order Giphy Sale

The CMA in October fined the company a record $70 million (roughly Rs. 525 crore) for breaching an order imposed during its investigation into the acquisition, having said in August that it may need Facebook to sell Giphy.

Competitor access

Facebook bought Giphy, a website for making and sharing animated images, or GIFs, for a reported $400 million (roughly Rs. 2,990 crore) in May 2020 to integrate the operation with its Instagram photo-sharing app. It has defended the deal to the CMA.

Another major provider of GIFs is Google's Tenor.

The regulator, however, was concerned that Meta could deny competitors access to Giphy GIFs, or force the likes of TikTok, Twitter, and Snapchat to provide more user data to use them.

It also said that innovative advertising services launched by Giphy in the United States before the deal could have been expanded to other markets such as Britain, where Meta controls nearly half of the GBP 7 billion (roughly Rs. 69,780 crore) display advertising market.

The CMA has been stepping up regulation of the Big Tech sector.

Last week Alphabet's Google pledged more restrictions on its use of data from its Chrome browser to address CMA concerns about plans to ban third-party cookies that advertisers use to track consumers.

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