Daily Management Review

UK watchdog ponders forcing Facebook to sell Giphy


The UK Competition and Markets Authority (CMA) has completed an investigation into the deal between Facebook and animated image service Giphy and has come to the preliminary conclusion that their merger is detrimental to free competition of online social platforms in the country.

On that basis, the watchdog did not rule out later asking Facebook to sell Giphy.

"Millions of posts on social networking sites now contain GIFs. Any reduction in the selection or quality of these GIFs could significantly affect how people use these sites and whether they move to another platform like Facebook. Since most of the major social networking sites competing with Facebook use GIFs from Giphy and there is only one other major GIF provider, Tenor from Google, those platforms have very little choice," the CMA said. 

Other major platforms such as Snapchat, TikTok and Twitter are also users of Giphy's services. As the regulator notes, Facebook, as one of the two major GIF providers, could either deny other social networks access to Giphy products or change the terms of access in its favor: for example, by forcing Giphy customers to share user data.

Facebook acquired Giphy in May 2020. The amount of the deal was not disclosed at the time, but according to Axios, Mark Zuckerberg's company paid about $400 million for the service.

source: reuters.com