Facebook could be forced to sell Giphy due to UK competition concerns

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Giphy, I think most of us have heard of them, and we probably use their GIFs daily. You probably didn’t know that Facebook purchased Giphy early last year for a reported $400m. The idea at the time was to integrate the Giphy service into Instagram.

Estimated reading time: 2 minutes

The British government may force Facebook to sell the GIF site after the “competition regulator” said that the deal might hurt the display advertising market.

The UK government has a branch known as the Competiton and Markets Authority, and they are tasked to ensure that one company doesn’t have a distinct advantage over others.

“Giphy’s takeover could see Facebook withdrawing GIFs from competing platforms or requiring more user data in order to access them. It also removes a potential challenger to Facebook,” said Stuart McIntosh, chair of the independent investigation for the CMA.

The CMA found that, before the Facebook deal, Giphy was considering expanding its paid advertising services offered in the United States to other countries, including the UK. However, Facebook terminated Giphy’s ad partnerships following the deal, according to the regulator.

“We disagree with the CMA’s preliminary findings, which we do not believe to be supported by the evidence. As we have demonstrated, this merger is in the best interest of people and businesses in the UK – and around the world,” a Facebook spokesperson said.

Reuters

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Last Updated on August 12, 2021.

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