Technology

Facebook must sell Giphy, orders UK regulator

Last month, the CMA fined the social media giant £ 50.5 million as part of its merger with Giphy, which specializes in short internet animations (GIFs), for continuing to integrate the two companies despite an investigation. in progress. (Photo: 123RF)

London – The British Competition Constable (CMA) on Tuesday ordered Facebook, recently renamed Meta, to sell its subsidiary Giphy because its merger “could harm social media users and advertisers in the UK,” according to a statement.

Last month, the CMA fined the social media giant £ 50.5 million as part of its merger with Giphy, which specializes in short internet animations (GIFs), for continuing to integrate the two companies despite an investigation. in progress.

In August this year, the regulator had already warned that Facebook might have to sell Giphy.

In June 2020, it issued a court order to stop the integration process between Facebook and Giphy, the purchase of which was announced in May 2020 and was estimated at $ 400 million.

This acquisition allowed Meta to integrate Giphy’s huge library into Instagram, its photo and video sharing service.

“The independent CMA panel that examined the merger concluded that Facebook could increase its already significant market share compared to other social networks by limiting or preventing other platforms’ access to gifs,” while Facebook and its subsidiaries WhatsApp and Instagram already “accounts for 73% of time spent on social media in the UK,” the statement said.

The CMA also feared that Meta would change the criteria for accessing Giphy’s moving images by forcing rivals TikTok, Twitter or Snapchat to “share more user data.”

It could also favor Facebook in online advertising when the internet giant already controls almost half of this market in the UK, which totals 7 billion pounds, the CMA said.

The regulator concluded, despite alternatives offered by Facebook, that the risks to competition engendered by this merger can only be resolved “if Facebook sells Giphy entirely to another approved buyer.”

A Meta spokesperson said the group “disapproves of this decision” and is considering its options, including the appeal.

“Consumers like Giphy are better positioned with the support of our infrastructure, talents and resources,” he says.

The tech giant is the subject of numerous investigations and lawsuits both on the competition front, as well as the risks its platform poses to young people, following revelations by a US whistleblower about its dangerousness.

EU member countries also adopted a common position on Thursday approving general draft European legislation to regulate the internet and end abuse of power by digital giants.

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