Technology

British regulator asks Facebook to sell Giphy

Meta might have to ignore the acquisition of Giphy: Mark Zuckerberg’s group had bought in 2020 this American company specializing in the exchange of GIFs and animated images.

A transaction that had been valued at $ 400 million. In a statement, the British competition authority, the Competition and Markets Authority (CMA), said it had ordered Facebook to resell its new acquisition.

According to the authority, this merger of the two companies would likely harm Internet users and advertisers in the UK.

700 million users per year

Giphy is the leading player in the market for sharing animated images as GIFs, with nearly 700 million users per year. Tenor, its main competitor, bought by Google in 2018, claims just over 300 million monthly active users.

But the strength of Giphy is its integration into many social media platforms, and the British authority fears that the acquisition of the company by the Meta group will lead Giphy to limit or prevent access to its service on other social networks.

The British authority is also concerned about possible changes in the conditions of access to the Giphy service for other social networks that wish to integrate the company’s GIF search engine. Giphy’s new managers could ask Facebook’s competitors, such as TikTok, Twitter or Snapchat, to provide a greater amount of personal data of users in order to integrate Giphy services on their platform.

Insufficient solutions

The CMA indicated that it had heard the solutions proposed by Facebook to respond to the concerns expressed by the authority, but considers that these are insufficient, so it considers that only a resale of Giphy could provide the necessary guarantees.

As reported by Le Monde, a Meta spokesperson indicates that the US group disapproves of this decision and considers a possible appeal.

The CMA had opened its investigation following the announcement of the Giphy acquisition and had already issued a first court order in June 2020, preventing the merger between Facebook and Giphy. Since then, Giphy has continued to operate as an independent subsidiary. However, Facebook had continued with the integration of the two companies, the CMA had imposed a fine of 50 million pounds on Facebook last month for not having respected the court order of the British authority.

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