UK Regulators May Force Facebook to Sell Giphy

Britain’s Competition and Markets Authority (CMA) has raised significant concerns over Facebook’s Giphy purchase and may force a sale.

Facebook bought Giphy, the popular animated GIF platform, for $400 million in 2020. The social media giant wanted to integrate with Instagram. That integration has raised major concerns with the CMA.

The CMA provisionally found that Facebook’s ownership of Giphy could lead it to deny other platforms access to its GIFs. Alternatively, it could change the terms of this access – for example, Facebook could require Giphy customers, such as TikTok, Twitter and Snapchat, to provide more user data in order to access Giphy GIFs. Such actions could increase Facebook’s market power, which is already significant. The CMA’s analysis suggests that Facebook’s platforms – Facebook, WhatsApp, and Instagram – account for over 70% of the time people spend on social media and are accessed at least once a month by 80% of all internet users.

The CMA has made it clear that, should its concerns be confirmed, it may force Facebook to sell Giphy, the latest setback for a Big Tech company looking to acquire a smaller service.