The UK Competition & Markets Authority (CMA) has provisionally concluded that the acquisition of Giphy by Facebook raises serious competition concerns.
The CMA said it believes the deal will harm competition between social media platforms, removing a potential rival in the display advertising market. Facebook is the largest provider of social media sites and display advertising in the UK, and Giphy is the UK's largest provider of GIFs.
The CMA has concluded that Facebook's control of Giphy could result in it stopping other social media platforms from accessing its GIFs. It could also change the terms of access, such as requiring Giphy customers to provide more user data for GIF access. Giphy customers include Facebook's social media rivals Snapchat, Twitter and TikTok.
Before the deal, Giphy was offering paid advertising in the US and was looking to expand these advertising services to other markets, including the UK. This would have provided competition to Facebook's display ad services. However, since the deal was completed in May 2020, Facebook has terminated Giphy's paid ad partnerships, losing an important source of potential competition.
Interested parties have until 02 September to respond to the CMA's provisional findings, and until 25 August to comment on its notice of possible remedies. The CMA's final decision is due by 06 October.
