The UK competition regulator has stated that Meta, Parent company of Facebook, Must cancel the purchase of Giphy, a year and a half after the social media giant announced that it was acquiring the service that produces Giphy (animated photos). The Competition and Markets Authority, Said it came to a decision after an investigation that the acquisition could hurt competition between the various arenas.
An independent panel of the authority examining the merger concluded that Facebook could increase its significant market power over other platforms by preventing or restricting other platforms’ access to Giphy’s GIFs, transferring more traffic to Facebook-owned sites such as WhatsApp and Instagram, which already account for 73 % Of the time spent on social media in the UK, “the authority said in a statement. They added that Meta could change the access conditions to other arenas “to provide more user data to access Giphy files”.
In addition, the authority believes that Giphy’s advertising services can compete with Meta’s services, but as a result of the merger – the former have closed. With respect to the advertising market, the Authority found that prior to the merger, Giphy has launched innovative advertising services that it is considering expanding to countries outside the United States. Giphy’s services allowed companies to promote their brands through visual images and gifs, “it read. In effect, the authority found that Giphy’s advertising services had the potential to connect to Facebook’s advertising services. Potential, “it read.
“Without action, it will allow Facebook to increase its significant market power, by controlling Giphy’s competitors’ approach to Giphy,” said Stuart McIntosh, chairman of the independent investigation team. Users and advance competition and innovation in digital advertising, “he said.
This will be the first time the authority is trying to cancel a purchase completed by a technology giant. Meta may appeal the decision, but it is a huge precedent the British regulator sets for the rest of the regulators in the world.
Meta has challenged the concerns in the past. For example she said there was never a chance that Giphy’s advertising business would become a real competitor. Meta said Giphy “has no significant audience of its own,” and immediately after announcing the acquisition, Meta provided 50 percent of all Giphy exposure and revenue. In addition, the meta said that “developers and partners will continue to have the same access to Giphy interfaces.”
Although Meta undertook to work with the authority in the investigation, the regulator recently fined the company $ 70 million for non-compliance with the terms of its initial enforcement order. The regulator tasted that meta “consciously explains to report all required information.”