UK: Facebook's parent company ordered to sell off Giphy

By Karim El-Bar

LONDON (AA) – Britain on Tuesday handed down a decision ordering Meta, formerly Facebook, to sell off Giphy, a US search engine for GIFs.

A press release said that the Competition and Markets Authority found that Meta’s takeover of Giphy “could allow Meta to limit other social media platforms’ access to GIFs, making those sites “less attractive to users and less competitive.”

“It also found the deal has removed Giphy as a potential challenger in the UK display advertising market, preventing UK businesses from benefiting from innovation in this market,” it added.

The authority concluded that Meta would be able to boost its already significant market power by “denying or limiting other social media platforms’ access to Giphy GIFs,” pushing people to Meta-owned sites, which already make up 73% of user time spent on social media in the UK.

The authority found that Meta could also change the terms of access, requiring other social media platforms such as Twitter and TikTok to provide more data from UK users in order to access Giphy, in addition to the fact that the merger would negatively impact ad markets.

“Before the merger, Giphy was offering innovative advertising services in the US and was considering expanding to other countries, including the UK,” the statement said.

“Giphy’s advertising services had the potential to compete with those of Meta, and would have encouraged greater innovation from Meta and other market players. However, Meta terminated Giphy’s advertising services upon acquisition, removing a potential ad tool for UK businesses,” it argued.

The authority said this was particularly concerning given that Meta controls almost half of the £7 billion display ad market in the UK.

Stuart McIntosh, chair of an independent group investigating the issue, said: “This deal would significantly reduce competition in two markets. It has already resulted in the removal of a potential challenger in the UK display ad market, while also giving Meta the ability to further increase its substantial market power in social media.

“The only way this can be addressed is by the sale of Giphy. This will promote innovation in digital advertising, and also ensure UK social media users continue to benefit from access to Giphy.”

A Meta spokesperson said they were disappointed by the decision “but accept today's ruling as the final word on the matter …We will continue to evaluate opportunities - including through acquisition - to bring innovation and choice to more people in the UK and around the world."