Facebook’s parent company Meta has been directed to sell GIF-sharing platform Giphy by a UK watchdog.
The Competition and Markets Authority (CMA) said it was ‘protecting millions of social media users and promoting competition and innovation in digital advertising’.
Its independent panel reviewing the merger said it increased Meta’s significant market power by denying or limiting access to Giphy GIFs, driving more traffic to Meta apps and changing the terms of access by requiring some rivals to provide more user data to access Giphy.
The Competition and Markets Authority has ordered Facebook’s parent company Meta to sell GIF-sharing platform Giphy
The watchdog said the deal also removed Giphy as a challenger in the display advertising market after it found Giphy had the potential to compete with Facebook’s ad business.
The CMA said Facebook’s termination of Giphy’s advertising services, was ‘particularly concerning’ given Facebook has nearly half the £7bn UK display advertising market.
Stuart McIntosh, chairman of the independent panel, said of a merger: ‘Without action, it will also allow Facebook to increase its significant market power in social media even further.’
Competition lawyer Peter Broadhurst said the decision was ‘hugely important’.
‘This is the first time the CMA has ever blocked a major digital tech deal and indicates the direction of travel for UK regulators’ oversight of similar deals,’ he said.
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