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UK competition watchdog orders Facebook to sell Giphy

Nov, 30, 2021 Hi-network.com

The UK competition watchdog has directed Facebook, which was recently renamed to Meta, to sell Giphy, after concluding that the social media conglomerate's acquisition of the GIF giant would reduce competition between social media platforms and the local advertising market.

In carrying out the review, the Competition and Markets Authority (CMA) said it found that through buying Giphy, Facebook would be able to increase its "already significant market power" by denying or limiting other platforms' access to Giphy GIFs and driving more traffic to Facebook-owned sites -- Facebook, WhatsApp, and Instagram -- which already account for 73% of user time spent on social media in the UK.

CMA added it found Facebook could also change the terms of access by, for instance, requiring other social media platforms like TikTok, Twitter, and Snapchat to provide more user data to access Giphy GIFs.

The investigation also looked at how the deal would affect the advertising market. CMA said it found that before the merger, Giphy was launching "innovative" advertising services by allowing companies to promote brands through visual images and GIFs, and had the potential to compete with Facebook's advertising services.

"Facebook terminated Giphy's advertising services at the time of the merger, removing an important source of potential competition. The CMA considers this particularly concerning given that Facebook controls nearly half of the

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