UK demands Meta Giphy sale - Mobile World Live

UK demands Meta Giphy sale

30 NOV 2021

The UK’s Competition and Markets Authority (CMA) ordered Meta Platforms to sell graphics maker Giphy, ruling a tie up completed in 2020 reduces competition in the social media and display advertising markets following a long-running investigation.

A probe was commenced by the CMA shortly after the deal completed in May 2020. Facebook was then blocked from integrating assets with its subsidiary Instagram while the investigation took place.

The CMA continued to refer to the recently-rebranded company as Facebook in its documentation.

It explained an independent panel reviewing the merger concluded Facebook would be able to increase its already significant market power by denying or limiting other platforms’ to access Giphy’s Graphic Interchange Format (GIF) images and drive more traffic to its own sites including WhatsApp and Instagram.

The CMA added Facebook could change terms of access by requiring rivals such as TikTok and Twitter to provide more user data in order to access Giphy. The panel also raised concerns about the removal of Giphy in the display advertising market, which it asserted would have been a competitor to Facebook had it remained a separate company.

Stuart McIntosh, chair of the independent enquiry group, said: “By requiring Facebook to sell Giphy, we are protecting millions of social media users and promoting competition and innovation in digital advertising.”

The CMA warned Facebook it may have to unwind the takeover, a stance the social media company rubbished, raising questions about the regulator’s power to force a sale.

In October, the CMA fined Facebook £50 million after ruling it failed to meet certain compliance rules after the deal was completed.

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Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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