Meta has been ordered to sell Giphy, the GIF video-archive site, by the UK’s competition regulator.
The Competition and Markets Authority said today the only way Meta can allay “competitive concerns” is to sell Giphy in its entirety to another buyer, following an investigation in the acquisition.
The CMA said Giphy being bought by the owner of Facebook and Instagram “would result in substantial lessening of competition in social media and display advertising, harming social media users and businesses in the UK”.
In its report, the CMA explained that when Meta terminated Giphy’s advertising services after the merger, it had removed an important source of competition and innovation in display advertising services.
This was “particularly concerning”, the report said, given that Meta controls nearly half of the £7bn display advertising market in the UK.
The CMA’s report found that when Meta bought Giphy, it denied or limited other social media platforms’ access to Giphy GIFs, driving more traffic to its sites like Facebook, WhatsApp and Instagram, which the CMA noted “already account for 73% of user time spent on social media in the UK”.
As an example of this, the CMA said Meta changed the terms of access to Giphy GIFs for TikTok, Twitter and Snapchat so they had to provide more user data to use them.
This comes after Meta was fined £50m last month, a record amount but still 0.08% of Facebook’s global revenue, for “deliberately” failing to provide information about the Giphy purchase during the investigation.
Stuart McIntosh, chair of the independent inquiry group carrying out the phase two investigation said: “The tie-up between Facebook and Giphy has already removed a potential challenger in the display advertising market.
“Without action, it will also allow Facebook to increase its significant market power in social media even further, through controlling competitors’ access to Giphy GIFs.
“By requiring Facebook to sell Giphy, we are protecting millions of social media users and promoting competition and innovation in digital advertising.”
Meta is considering appealing against the decision, and a spokesman said that the deal would be good for Giphy, consumers and businesses.
A Meta spokesperson told Mediatel News: “We disagree with this decision. We are reviewing the decision and considering all options, including appeal. Both consumers and GIPHY are better off with the support of our infrastructure, talent, and resources. Together, Meta and GIPHY would enhance GIPHY’s product for the millions of people, businesses, developers and API partners in the UK and around the world who use GIPHY every day, providing more choices for everyone.”
