Giphy (website pic)
The British Competition and Markets Authority (CMA) has ordered that Meta, the parent company of Facebook, sell its Giphy subsidiary due to antitrust concerns. Meta said that it disagrees with the ruling, but will comply with it.
Facebook has been under scrutiny over monopolistic practices for some time as it also owns the social imaging platform Instagram and the messaging service WhatsApp.
The CMA said this ruling was final, after going back and forth with Facebook since its decision was first announced last year. Meta had appealed the initial ruling in July.
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Giphy is an American online database and search engine that allows users to search for and share short looping videos with no sound. The name come from animated images called “Gifs.” Facebook acquired Giphy in 2020.
The UK is specifically concerned that Meta’s acquisition of yet another media platform would harm competition for the pricing of advertisements. The XCMA said that Meta could force advertisers to use only Facebook by denying advertising on Giphy. It could even set the same rates for the two services.
“This deal would significantly reduce competition in two markets,” Stuart McIntosh, chair of the independent inquiry group carrying out the CMA’s investigation said. “It has already resulted in the removal of a potential challenger in the UK display ad market, while also giving Meta the ability to further increase its substantial market power in social media.”
A Meta spokesperson said in a statement, “We are disappointed by the CMA’s decision but accept today’s ruling as the final word on the matter. We will work closely with the CMA on divesting Giphy.”
Facebook/Meta, however, will not be deterred from making further such acquisitions in the future. “We will continue to evaluate opportunities,” said the company, “including through acquisition – to bring innovation and choice to more people in the UK and around the world.”
