The UK’s Competition and Markets Authority has ordered Meta to sell off Giphy in its entirety after flagging up several competition relation issues with the acquisition. The regulator found that Meta could limit others companies’ access to GIFs and that Giphy could have entered the display advertising market to challenge Meta, had Meta not bought the company.
Following a three-month review, the CMA found that Meta could increase its significant market power with the acquisition of Giphy in the following ways:
- denying or limiting other social media platforms’ access to Giphy GIFs, thereby pushing people to Meta-owned sites, which already make up 73% of user time spent on social media in the UK, or
- changing the terms of access – for example, it could require Giphy customers, such as TikTok, Twitter and Snapchat, to provide more data from UK users in order to access Giphy GIFs
On the advertising issue, it’s worth noting that Giphy had never begun advertising in the UK, it had in the U.S., but not in the UK where the CMA has authority. Regardless, the CMA mentions that Giphy was considering expanding ads to other places, including the UK, and that Meta’s acquisition is a threat to competition. Giphy’s advertising was interesting, too, as it allowed brands to promote their products through images and GIFs.
Following this latest review, the CMA wants Meta to sell Giphy to an approved buyer in its entirety. Meta has put out a statement admitting defeat in the matter and will sell Giphy. It has wished employees at the company “every success” going forward, according to CNBC.