Facebook ordered to sell Giphy by competition watchdog

Facebook has ordered the sale of its motion picture service Giphy by the competition watchdog in its biggest intervention against the Silicon Valley giant to date.

The company, now known as Meta, was asked to scrap its $315m (£236m) takeover of Giphy, which completed last year, after the Competition and Markets Authority found the deal could hurt Facebook’s rivals and allow it to control more digital. advertising market.

It is the most significant order from the regulator against a US tech company since it gained greater control over competition issues after Brexit.

Stuart MacIntosh, who led the CMA investigation, warned that the deal could “allow Facebook to further increase its significant market power in social media, by controlling competitors’ access to Giphy Gifs.”

Facebook said it did not agree with the decision and was considering appealing the ruling.

We are reviewing the decision and considering all options, including an appeal. Both consumers and Giphy are better off supported by our infrastructure, talent, and resources,” a spokesperson said.

“Together, Meta and Giphy will enhance the Giphy 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.”

Giphy is the world’s largest database of animated GIFs, which are used across social media and messaging apps, and allow users to share them on other social networks.

The CMA said Facebook’s ownership of the company could give it vital insights into how consumers use other services, or it could prevent rival services from accessing Giphy.

The regulator also said that the deal removed Giphy as an ad competitor to Facebook, which owns Instagram and WhatsApp.

The CMA ordered Facebook to keep Giphy as a separate company in June 2020, and issued a £50.5m fine last month for failing to provide information showing it had complied with the order.

The regulator added that Facebook’s proposed remedies, such as a promise to keep the service open to competitors, were not enough to address competition concerns.

The Capital Market Authority has opened several competition investigations against major technology companies in recent months. It assesses Apple and Google’s control of mobile services such as app stores, and recently reached agreements with Google over changes it was making to the Chrome web browser.

It is separately investigating the Facebook market and dating service to assess whether it is giving the company an unfair advantage in advertising.

“By asking Facebook to sell Giphy, we are protecting millions of social media users and encouraging competition and innovation in digital advertising,” Macintosh said.

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