Facebook owner Meta has been ordered to sell Giphy (PA)
(Picture: PA Wire)The UK’s competition watchdog today flexed its muscle as it ordered Facebook to sell Giphy, the GIF platform it bought for $400 million last year.
The Competition and Markets Authority (CMA) said its in-depth investigation had concluded that Facebook’s ownership of Giphy had reduced competition in the online advertising market and could reduce competition between social media platforms. Only a sale can address the issues, the CMA said.
Stuart McIntosh, who led the CMA’s 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.”
A spokesperson for Meta, Facebook’s parent company, said: “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.”
The ruling marks a significant intervention by the CMA. Both Facebook and Giphy are based in the US. The CMA claims authority over the deal given the large UK user base of both Facebook and Giphy.
Ordering the unwinding of a completed deal is relatively rare. Facebook can now seek an appeal of the ruling in the UK court system. If it fails it will be required to sell Giphy or face legal action.
