LONDON – Britain’s Competition and Markets Authority (CMA) told Meta on Tuesday that it needs to sell GIPHY. However, the company itself disagrees with the regulator’s findings and may appeal.
Regulator Warns of Harm to Social Media Users
The CMA found that holding on to the animated search engine could mean that Meta could limit or deny access to its GIFs to platforms that it doesn’t own. The parent company could also change the terms of access, such as asking the likes of TikTok, Twitter, and Snapchat to provide more user data to access GIFs.
Stuart McIntosh, Chair of the independent inquiry group that conducted the CMA’s investigation said:
The tie-up between Facebook and Giphy has already removed a potential challenger in the display advertising market. Without action, it will also allow Facebook to increase its significant market power in social media even further, through controlling competitors’ access to Giphy GIFs. By requiring Facebook to sell Giphy, we are protecting millions of social media users and promoting competition and innovation in digital advertising.
(The investigation began prior to Facebook changing its name to Meta and the CMA continues to use the company’s old name.)
Meta May Appeal Requirement to Sell GIPHY
A Meta spokesperson told The Mac Observer that the company is now preparing a response and may appeal.
We disagree with this decision. We are reviewing the decision and considering all options, including appeal. Both consumers and GIPHY are better off with the support of our infrastructure, talent, and resources. Together, Meta and GIPHY would enhance GIPHY’s product for the millions of people, businesses, developers and API partners in the UK and around the world who use GIPHY every day, providing more choices for everyone.
Facebook purchased GIPHY for U.S.$400 million in May 2020.