UK watchdog orders Facebook owner Meta to sell Giphy

The UK competition watchdog has formally asked Meta (Facebook's parent company) to scrap its acquisition of popular GIF website Giphy, a year and a half after the social media giant first announced it was acquiring the GIF-making and sharing website.

 In a press release, the CMA said it came to the decision after its investigations concluded that the acquisition could harm competition among social media platforms.  And the authority's concerns can only be addressed by Facebook selling the entire Giphy site to an authorized buyer.

 The CMA said the acquisition could be used to deny or limit other platforms' access to Giphy's GIF and drive more traffic to Facebook, WhatsApp and Instagram.

 It also raised concerns that it could be used to require other platforms to provide more data to access GIFs.  The authority also believes that Giphy's advertising services could have competed with Meta.  But it was closed as a result of the merger.

 The link between Facebook and Giphy removed a potential competitor in the display ad market.  Without taking action, this also allows Facebook to further increase its significant market power in social media, by controlling competitors' access to Giphy.

 "By asking Facebook to sell Giphy, we are protecting millions of social media users and promoting competition and innovation in digital advertising," the authority said.

 The Financial Times previously reported that this is the first time the authority has attempted to break up a completed acquisition by the tech giant.  Although Mita may appeal the decision.  The UK regulator's decision sets a notable precedent for future major technology purchases.  

Meta Claim to Sell Giphy

 The commission's decision was not a complete surprise after the preliminary results report issued in August stated that the deal should be cancelled.

 In response to the decision, Mita said the company was considering all of its options, including an appeal.  She added: "Both consumers and Giphy are better off supported by our infrastructure, talent, and resources."  Meta brings the Giphy product to the millions of people, companies and developers in the UK and around the world who use Giphy every day.  This provides more options for everyone.

 Meta has also previously opposed the commission's competition concerns.  She suggested that there was no chance of Giphy's advertising business becoming a strong competitor.

 In response to the regulator's investigation, the company argued that Giphy does not have a meaningful audience of its own.  When it announced the acquisition, Meta said it saved 50 percent of Giphy's total traffic.

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