The Competition and Markets Authority said the deal would allow Facebook “to increase its already significant market power,” by denying or restricting other platforms’ access to Giphy GIFs, and directing traffic to Facebook-owned sites. GIF, which is Google’s Tenor.
The regulator was also concerned that the deal removed potential competition from the UK’s 7 billion pound ($9.3 billion) display advertising market, half of which is controlled by Facebook. Which represents an escalation by regulators seeking to tame the digital giants.
Facebook, which has been renamed META, said it disagrees with the decision and is considering all of its options, including an appeal. “Both consumers and Giphy are better off supported by our infrastructure, talent, and resources,” together, it will strengthen Meta and Giphy is a Giphy product for the millions of people, companies, developers and API partners in the UK and around the world who use Giphy every day, giving everyone more choice.”
After consulting with companies and other groups and evaluating alternative solutions proposed by Facebook, the watchdog said it had “concluded that competition concerns can only be addressed by selling the entire Giphy to an authorized buyer,” said Stuart McIntosh, head of the independent group that conducted the investigation, The deal “really eliminated a potential competitor in the display advertising market.”
“Without taking action, it would also allow Facebook to increase its significant market power in social media even further, by controlling competitors’ access to Giphy GIFs,” he said. “By requiring Facebook to sell Giphy, we are protecting millions of social media users.” We encourage competition and innovation in digital advertising.”