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The UK’s antitrust watchdog has blocked Facebook’s acquisition of Giphy and ordered the social network to sell off the GIF-sharing platform, saying the deal hurts social media users and advertisers by stifling competition for animated images.
The Competition and Markets Authority says the deal would let Facebook, which has been renamed Meta, “increase its already significant market power” by denying or limiting other platforms’ access to Giphy GIFs and driving traffic to Facebook-owned sites.
It’s reportedly the first time the watchdog has sought to unwind a tech deal.
After consulting with other businesses and groups and assessing alternative solutions proposed by Facebook, the watchdog said it “concluded that its competition concerns can only be addressed by Facebook selling Giphy in its entirety to an approved buyer”.
“By requiring Facebook to sell Giphy, we are protecting millions of social media users and promoting competition and innovation in digital advertising,” said Stuart McIntosh, chair of the group that carried out the investigation.
Giphy acts as an online gallery for users to generate, share, and upload short looping videos, or GIFs, for public use and proliferation across multiple social media platforms. Giphy’s library is a popular tool for internet users sending messages or posting on social media. Some creators have taken to selling customized GIF sets, uploading the free versions using Giphy as a marketing approach.
The two sides have waged a bitter battle over the deal, reportedly worth $US400 million ($A561 million).
The Competition and Markets Authority said in a provisional decision in August that Facebook should be forced to sell Giphy.
The social media giant responded with a strongly worded letter, saying the provisional decision contained “fundamental errors”. There is no word yet on furthering the decision.
Facebook, now Meta, didn’t immediately respond to a request for comment on the decision.
With AAP.
Nina Alvarez is a writer and content producer. Her interests include writing, particularly about different forms of digital communication and the many ways it can impact the flow of information through varying demographics.
