Facebook’s acquisition of Giphy raises competition concerns, says CMA

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The logos of Facebook and Giphy.

Aytac Unal | Anadolu Agency via Getty Images

LONDON – The UK competition authority announced Thursday that Facebook’s acquisition of popular GIF website Giphy raised competition concerns.

The competition and market regulator said it has tentatively determined that Facebook’s purchase of Giphy will affect competition between social media platforms and eliminate a potential challenger in the display advertising market.

Stuart McIntosh, chair of the independent research group conducting the Phase 2 investigation, said in a statement that Facebook could pull GIFs from competing platforms or prompt users to hand over more data to access.

McIntosh said the deal also removed a “potential challenger” for Facebook in the £ 5.5 billion display advertising market.

“While our investigation has identified serious competition concerns, these are preliminary,” said McIntosh.

“We will now consult our results before we finalize our review. Should we conclude that the merger is harmful to the market and social media users, we will take the necessary steps to ensure that people are protected. “

Facebook did not immediately respond to a CNBC request for comment.

At the time of the takeover, Facebook announced that it would continue to integrate Giphy into the Instagram app “so that people can find exactly the right way to express themselves.”

Facebook has tried to downplay claims that the deal could restrict competition.

“Developers and API partners will continue to have equal access to Giphy, and Giphy’s creative community will continue to create great content,” a Facebook spokesperson said in May last year.

“We are ready to show regulators that this acquisition is positive for consumers, developers and content creators alike.”