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Facebook slams UK watchdog’s call to sell Giphy

The Facebook app is seen on a phone screen  (REUTERS)

Facebook Inc. slammed the U.K.’s antitrust regulator over its provisional call that the tech giant would have to sell all of Giphy to address competition concerns, setting up a bitter fight over the completed deal. 

Selling off the company that Facebook bought last year for $400 million would be “grossly unreasonable and disproportionate," Facebook argued in a response to the Competition and Markets Authority’s concerns published on Wednesday.

The cases open up yet another front for the world’s biggest tech firms to fight on. The European Union and Germany are already investigating Facebook’s use of personal data while the CMA is looking at its Marketplace and Dating services. In the U.S. antitrust officials refiled their monopoly lawsuit against Facebook that was tossed in June.

Facebook said regulators should carefully weigh “the intrusive step of ordering the sale of a company which does not carry on business in the U.K." and that there are also questions on whether a global divestment can be enforced by the British authority.

The Silicon Valley firm has been fighting the CMA for more than a year over a deal it completed before seeking approval from the U.K. or other authorities. The company is in the eye of the storm as global regulators crack down on big tech takeovers of potential smaller rivals. 

Regulators faced a barrage of criticism for allowing Silicon Valley to snap up potential rivals before they make it big. Facebook’s game-changing takeover of photo-sharing app Instagram is often cited as a deal that was waved through by regulators without proper scrutiny.

The CMA didn’t accept an offer Facebook made in March for rivals and customers to be able to access Giphy’s library on the same terms as before the deal for five years. 

“Our preliminary view was that full divestiture of Giphy would represent a comprehensive and effective remedy. However we will consider any behavioral remedies put forward as part of our consultation," a spokesperson from the CMA said.

It has set an Oct. 6 deadline for a decision on the inquiry to be made. 

This story has been published from a wire agency feed without modifications to the text.

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