Bought for 400 million dollars, the former Facebook group may have to separate from its bank of animated Gifs.
Hard blow for Facebook and the Meta group. In Great Britain, the CMA (Competition & Markets Authority) has just ordered the empire founded by Mark Zuckerberg to separate from Giphy, its trading platform. creation and sharing of Gifs. Acquired more than a year ago by Facebook, which at the time had spent nearly $ 400 million to complete this transaction, Giphy is today accused by the British regulator of being too much advantage on the group’s networks. A decision that concludes an investigation launched by the CMA in 2020, at the time of the merger between the two American companies. Last October, the competition authority had already sanctioned Facebook with a £ 50.5million fine (ie 59 million euros) for not having complied with the initial ban on repurchase pronounced by the CMA.
We’ve directed #Facebook to sell Giphy after finding the takeover could reduce competition between social media platforms and increase Facebook’s already significant market power. pic.twitter.com/yRaPxMR43z
— Competition & Markets Authority (@CMAgovUK) November 30, 2021
Meta in the viewfinder
At a time when Facebook “Controls almost half of the UK online advertising market”, Giphy’s hegemony has difficulty passing through the CMA. It must be said that since its takeover by Facebook, the platform, a pioneer in the GIF market, is no longer accessible except on the services of the Meta group (WhatsApp, Messenger and Instagram in particular), as well as on certain third-party platforms such as TikTok and Snapchat, who in return must agree to provide more user data.
Without concrete action from the authorities, the CMA now fears that the merger between Meta and Giphy will allow Facebook “To further increase its power on the market, in particular by controlling the access of its competitors to Gifs in the Giphy catalog”. By ordering the sale of the platform, the regulator now hopes “Protect millions of social media users, while promoting competition and innovation in digital advertising”. For his part, Facebook / Meta does not rule out appealing this decision. In a declaration sent to the site The Verge, the company still considers that “Together, Meta and Giphy could improve the service currently offered by Giphy, for millions of individuals, but also for businesses, in the UK and around the world”.