LONDON: The British competition regulator on Tuesday ordered Meta, the parent company of Facebook, to sell the animated image-sharing Giphy – a popular online platform for making and sharing animated images or GIFs.
The Competition and Markets Authority (CMA) said its review of Facebook’s acquisition of Giphy found that the deal could harm social media users and advertisers in the United Kingdom.
“By requiring Facebook to sell Giphy we are protecting millions of social media users and promoting competition and innovation in digital advertising,” said Stuart McIntosh, from the Competition and Markets Authority.
The regulator stated that Facebook’s acquisition of the popular gif-sharing platform would reduce competition between social media platforms while also removing Giphy as a potential challenger in the online advertising market.
The CMA’s review also raised concerns that Facebook could leverage the acquisition to increase its market power by denying or limiting other platforms from accessing Giphy’s library of GIFs.
The regulator also noted that the acquisition allows Facebook to change the terms of access to the gif-sharing tool, thereby forcing Giphy users on other social platforms such as TikTok, Twitter, and Snapchat to give access to more user data.
On the other hand, Facebook indicated that it will appeal the decision.
It is pertinent to mention here, Facebook acquired Giphy back in May 2020 for a reported price of $400 million. At that time Facebook announced plans to integrate Giphy into Instagram.