UK antitrust watchdog orders Facebook to sell Giphy

London (Associated Press)-The UK’s antitrust regulator blocked Facebook’s acquisition of Giphy and ordered the social network to sell the GIF sharing platform, saying that the transaction harmed social media users and advertisers by stifling competition in animated images.

The Competition and Markets Authority said on Tuesday that by denying or restricting access to Giphy GIF by other platforms and increasing traffic to Facebook-owned websites, the transaction will enable Facebook to “enhance its already important market power.” It previously pointed out that there is only another large GIF provider, Google’s Tenor.

Regulators are also concerned that the transaction eliminates potential competition in the UK’s 7 billion pounds ($9.3 billion) display advertising market, with Facebook controlling half of it.

This is the first time a regulator has attempted to dissolve technology transactions, marking an escalation in the regulator’s attempt to tame digital giants.

Facebook, which has been renamed Meta, said it disagrees with the decision and is considering all options, including appeals.

“With the support of our infrastructure, talent and resources, both consumers and Giphy will get better,” the company said. “Meta and Giphy will work together to improve Giphy’s products for millions of people, companies, developers, and API partners who use Giphy every day in the UK and around the world, giving everyone more choices.”

After consulting other companies and groups and evaluating alternative solutions proposed by Facebook, the regulator stated that it “concluded that its competition issues can only be resolved by Facebook selling Giphy in its entirety to approved buyers. .”

Stuart McIntosh, chairman of the independent panel of the supervisory agency responsible for the investigation, said the deal “has eliminated potential challengers in the display advertising market.”

“If no action is taken, it will also allow Facebook to further enhance its important market influence in social media by controlling competitors’ access to Giphy GIF,” he said. “By asking Facebook to sell Giphy, we are protecting millions of social media users and promoting competition and innovation in digital advertising.”

Giphy’s short loop video library or GIF in New York is a popular tool for Internet users to send messages or post on social media.

The two sides fought a fierce battle over the transaction, which was reportedly worth 400 million U.S. dollars.

The Competition and Markets Authority stated in an interim decision in August that Facebook should be forced to sell Giphy. The social giant responded to a strongly worded letter, stating that the interim decision contained “fundamental errors.”

Last month, the regulator imposed a fine of 50.5 million pounds ($67.4 million) on Facebook for failing to provide the information required for the investigation, saying the company’s failure to comply with the regulations was intentional.

The regulator said that prior to the transaction, Giphy had been considering expanding its advertising services to other countries, including the United Kingdom. This would add a new player to the market and encourage social media sites and advertisers to innovate more, but Facebook terminated Giphy said that after announcing the deal, advertising partnerships.


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