Recently an independent UK regulator has asked Facebook or Facebook parent organization Meta to sell Giphy. Facebook has adhered to acquiring the famous GIF-sharing platform back in May 2020 for $35m.
However, currently, CMA, the Competition and Markets Authority of the UK, has published an order for Meta (Facebook) to sell Giphy on anti-competition grounds.
The CMA found,
“Facebook’s acquisition of Giphy would reduce competition between social media platforms and that the deal has already removed Giphy as a potential challenger in the display advertising market.”
By refusing competitor platforms ready access to Giphy’s GIFs, the regulator discovered that the social media platform, Facebook, would be competent to raise its already substantial market power, which it applies across Instagram and WhatsApp along with Facebook itself.
Furthermore, it discovered a problem with the possibility for the company to modify its eligibility conditions and to need the likes of Twitter, TikTok, and Snapchat to offer more user data in response to get access to Giphy.
The CMA additionally uncovered that Facebook’s Giphy purchase refused the possibility for greater creativity in the display promotion space. Giphy had rolled out its creative advertising platform before the acquisition and has plans to increase it into further markets. This could have offered rivalry to Meta’s superior position. However, the social media tech giant immediately closed the platform after the takeover.
The CMA’s report concludes that this imbalance.
“can only be addressed by Facebook selling Giphy in its entirety to an approved buyer.”
However, Meta could appeal the order and has contended in the past that Giphy had “no display advertising product” and “no meaningful audience of its own.”