British antitrust watchdog says Facebook's owner must sell Giphy

Nov. 30 (UPI) -- Britain's antitrust watchdog on Tuesday blocked Facebook's parent company from owning the GIF-sharing platform Giphy, saying that the acquisition would give the platform too much social media power and stifle competition.

The Competition and Markets Authority ordered Meta to sell Giphy following a lengthy investigation.

CMA said Meta's acquisition may affect both the supply of display advertising in Britain and social media services worldwide.

"By requiring Facebook to sell Giphy, we are protecting millions of social media users and promoting competition and innovation in digital advertising," Stuart McIntosh, head of the independent inquiry group that conducted the investigation, said in a statement.

The watchdog said the Giphy acquisition would reduce competition by removing the GIF sharing platform as a potential challenger in the display advertising market.

Meta completed the acquisition of Giphy 18 months ago, but has been required to hold it as a separate business since June 2020 pending the outcome of the investigation.

The CMA concluded that allowing Meta to keep Giphy would deny other platforms access to it and drive more traffic to other Meta-owned sites. WhatsApp, Instagram and Facebook already account for 73% of user time spent on social media in Britain, it noted.

The CMA found that prior to the acquisition, Giphy launched innovative advertising services that were expanding to countries outside the United States. But Meta has since ended those services and, thus, restricted competition, the watchdog found.

The CMA fined Meta more than $57 million last month for violating an enforcement order during its investigation into the Giphy merger.

Meta responded to the order on Tuesday by saying that it's reviewing all possible options to move forward with its purchase of Giphy.

"We disagree with this decision," a Meta spokesperson said in an emailed statement to UPI. "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 [app] partners in the U.K. and around the world who use Giphy every day, providing more choices for everyone."