UK antitrust agency: Meta has to sell Giphy again

Status: 11/30/2021 1:57 p.m.

The British competition regulator CMA calls for Meta to sell the Giphy clip platform. The reasoning states that the purchase stifles competition in the field of animated images.

The British competition authority Competition and Markets Authority (CMA) is asking the Facebook group Meta to sell its GIF platform Giphy again. The agency said the purchase of the start-up announced last year is harming social network users by stifling competition in the field of animated images.

Giphy is a US platform based in New York that enables users to search and share animated GIF files. The company was founded in 2013; it states that the company’s goal is to “make communication more fun”. Meta bought the company for around 350 million euros. Now Facebook has to give up the clip platform again.

Deal creates “considerable market power”

The deal would otherwise enable Facebook to “increase its already considerable market power” by denying or restricting other platforms’ access to Giphy GIFs. Apps like TikTok, Twitter and Snapchat could be forced to submit more user data in order to use Giphy.

In addition, traffic could be directed to meta-specific websites such as Facebook, WhatsApp and Twitter. In any case, these offers would account for 73 percent of the time British users spend on social media.

60 million euros fine

It is reportedly the first time the CMA has sought to break up a tech deal. In October, the CMA had threatened Meta with a fine of 60 million euros because Meta had refused to pass on information about the Giphy purchase. After consulting with other companies, it has now come to the conclusion that the US giant Giphy must sell to an approved buyer. This is the only way to dispel competition concerns.

Alternative solutions proposed by Facebook have been rejected. “By asking Facebook to sell Giphy, we are protecting millions of social media users and promoting competition and innovation in digital advertising,” said Stuart McIntosh, chairman of the research group.

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