UK competition regulator orders Facebook to sell Giphy

The competition regulator said Facebook’s acquisition of Giphy would reduce competition among social media platforms and “the deal has already removed Giphy as a potential challenger in the display advertising market.”

A panel of CMA decided that Facebook should increase its “significant market power” through acquisitions by “denying or limiting other platform access to Giphy” and driving more traffic to Instagram, WhatsApp, Instagram and other Facebook-owned sites. will be able to. It noted that such platforms already account for 73% of the time users spend on social media. It also said the acquisition would allow Meta to change its terms of access and require other platforms to use Giphy’s library to “provide more user data.”

“As part of its in-depth investigation, CMA also looked at how the deal would affect the display advertising market. It found that, prior to the merger, Giphy had launched innovative advertising services, which it plans to launch in the US, including the UK. was considering expanding to outside countries,” the regulator said in a statement. “Giphy’s services allow companies — such as Dunkin’ Donuts and Pepsi — to promote their brands through visual images and GIFs,” noting that Giphy’s planned advertising services compete with Facebook’s own display advertising services. Could do

“By requiring Facebook to sell Giphy, we are protecting millions of social media users and promoting competition and innovation in digital advertising,” the CMA said in its statement.

The social media giant bought Giphy in May last year for $315 million, and said that 50% of the GIF platform’s traffic at the time was already coming from the Facebook family of apps. “We are reviewing the decision and considering all options, including appeals,” the company said in a statement.

While the UK move is perhaps the most significant regulatory pushback ever against big tech firms like Facebook, it is not the only one. The social media firm, which renamed itself Meta earlier this year, is facing similar allegations from competition regulators around the world.

A lawsuit filed by the US Federal Trade Commission against the company in August called for the disbanding of Facebook and its subsidiaries, and called CEO Mark Zuckerberg a “monopoly”.

The Competition Commission of India (CCI) in October last year had also raised concerns about the data sharing agreements between domestic telecom giant Reliance Jio and Facebook. CCI’s concerns came while approving Facebook’s investment in Jio Platforms Limited to acquire a 9.99% stake in the company.

Facebook had told the CCI that its agreements with Jio do not allow sharing of critical and confidential data and that the data shared between the two companies is “neither exclusionary nor scarce”.