Giphy’s Facebook acquisition sets off congressional antitrust alarm

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On Friday, a bipartisan group of senators raised alarm over antitrust enforcement over the recently announced Facebook acquisition of Giphy, a GIF creation and sharing website.

Facebook announced on Friday that it would acquire Giphy for the announced price of $ 400 million. Giphy is one of the largest GIF sites on the Internet and social media and messaging services like Twitter, Tinder, Slack and iMessage have already integrated Giphy into their applications.

In a blog post published on Friday, Facebook said that half of Giphy’s traffic came from Facebook applications and that the gif website would be integrated with Instagram, a product owned by Facebook. In the same article, Facebook suggested that Giphy’s main function as a GIF sharing application on social networks would not change and that developers “would continue to have the same access” to its services.

However, this commitment has not appeased the growing chorus of delegates concerned about Facebook’s potential anti-competitive behavior. Republican Senator Josh Hawley (R-MO) and Democrat Democrats Elizabeth Warren (D-MA) and Amy Klobuchar (D-MN) were skeptical about the deal on Friday.

“Facebook continues to look for even more ways to take our data,” Hawley said in a statement to The edge. “Just as Google bought DoubleClick because of its widespread presence on the Internet and its ability to collect data, Facebook wants Giphy so that it can collect even more data about us. Facebook is not expected to acquire businesses while it is under antitrust investigation for past purchases. ”

In recent weeks, Democrats like Warren, Klobuchar, the representative of Alexandria Ocasio-Cortez (D-NY) and the representative David Cicilline (D-RI) have called for a comprehensive review of large corporate mergers in the middle of the new coronavirus pandemic. Warren and Ocasio-Cortez have announced plans to introduce the “Pandemic Anti-Monopoly Act” which would impose a moratorium on large mergers until the Federal Trade Commission “determines that small businesses, workers and consumers” were “no longer in great financial difficulty.” ”

In a statement released on Friday, a spokesperson for Warren lobbied for the passage of the bill in light of Giphy’s Facebook purchase. “The Facebook acquisition is another example of a giant company using the pandemic to further consolidate its power – this time it is a company with a history of privacy breaches that is gaining more control over communications in online, “said Warren’s spokesperson.

Earlier this week, Klobuchar signed a letter with Warren and Cicilline to the Federal Reserve and the Treasury Department asking them to stop all mergers between large companies that have received “bailout” funding for Coronavirus rescue programs of Congress. Klobuchar said in a statement on Friday that “the Department of Justice or the Federal Trade Commission must investigate this proposed deal”.

Klobuchar continued, “Many companies, including some of Facebook’s competitors, are relying on Giphy’s library of shareable content and other services, so I am very concerned about this proposed acquisition. “

Republicans have largely pushed back Democrats’ calls for a moratorium on mergers. In a letter earlier this week, the Republicans asked the Justice Department and the FTC to refuse any changes to the enforcement of antitrust laws during the pandemic. “Unfortunately, these ideas are an integral part of the latent socialism adopted by many modern democrats, which poses an existential threat to America’s economic superiority,” the Republicans wrote.

Makan Delrahim, the top justice officials at the Department of Justice, said CNBC On Wednesday, it would be “wrong to simply block all attempted transactions”.

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