The UK’s competition regulator opened an in-depth investigation into an acquisition of graphics creation tool and database Giphy by Facebook, after the social media giant refused to offer concessions to appease its concerns.
In a statement, the Competition and Markets Authority (CMA) said the already completed acquisition would be referred for a detailed investigation to assess its impact on competition in digital advertising and supply of Graphics Interchange Format (GIF) assets.
Last week, the CMA published the conclusions of its initial probe with Facebook given five days to offer concessions, an offer the company declined.
In its conclusion to its first stage investigation, the CMA noted the merger could lessen Giphy’s “incentive to expand its digital advertising, leading to a loss of potential competition in this market.”
It added Facebook held more than 50 per cent of the £5.5 billion display advertising market in the UK, citing a study conducted in July 2020.
Other concerns surround terms and restrictions which could be imposed on supply of GIFs on Facebook’s rival social media platforms.
Facebook completed its acquisition of Giphy in May 2020. However, the social media company was blocked from executing a plan to integrate its new assets with Instagram by a CMA enforcement order slapped on it a month later, which is valid for the duration of its investigation.
Attempts by Facebook to have some of the restrictions lifted were thrown out by a tribunal in November 2020.
The latest CMA probe has a deadline of 15 September 2021.Subscribe to our daily newsletter Back