UK competition watchdog orders Meta to sell Giphy

UK competition watchdog orders Meta to sell Giphy

SHARE IT

01 December 2021

The UK’s competition regulator has ordered Facebook’s owner Meta to sell popular animated images platform Giphy. According to the Competition and Markets Authority (CMA), Meta’s acquisition of Giphy could reduce competition between social media platforms and in displaying advertising.

In a statement, Stuart McIntosh, chair of the independent inquiry group heading the CMA probe, said: 

The tie-up between Facebook and Giphy has already removed a potential challenger in the display advertising market. Without action, it will also allow Facebook to increase its significant market power in social media even further, through controlling competitors’ access to Giphy GIFs. By requiring Facebook to sell Giphy, we are protecting millions of social media users and promoting competition and innovation in digital advertising

After detecting competition issues, the CMA initiated an investigation into Meta's takeover of Giphy, the largest supplier of animated gifs to social networks like as Snapchat, TikTok, and Twitter, last summer. The regulator said Meta could cut off the supply of gifs to rivals, or demand more user data from them in order to keep using Giphy.

After consulting with interested businesses and organizations — and assessing alternative solutions (known as ‘remedies’) put forward by Facebook — the CMA has concluded that its competition concerns can only be addressed by Facebook selling Giphy in its entirety to an approved buyer,” the CMA wrote in a press release.

The CMA found that Giphy’s advertising services had the potential to compete with Facebook’s own display advertising services,” the regulator wrote. “They would have also encouraged greater innovation from others in the market, including social media sites and advertisers. 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 £7 billion display advertising market in the U.K.

In a brief statement now, in response to the CMA’s final word, a Meta spokesperson said:

We disagree with this decision. We are reviewing the decision and considering all options, including appeal. Both consumers and Giphy are better off with the support of our infrastructure, talent, and resources. Together, Meta and Giphy would enhance Giphy’s product for the millions of people, businesses, developers and API partners in the U.K. and around the world who use Giphy every day, providing more choices for everyone
View them all