British watchdog to investigate Facebook takeover of Giphy | Facebook

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UK competition regulator launches full investigation into Facebook’s $ 400million (£ 290million) acquisition of gif creation site Giphy, fearing it could lead to a cut in the supply of gifs to other social networks such as Snapchat, TikTok and Twitter.

The Competition and Markets Authority (CMA) said on Thursday it feared the takeover could “lead to a substantial lessening of competition” for gif creation in the UK and other markets.

The AMC said it asked Facebook to address its concerns, but Facebook refused to do so.

The most popular gif of 2020 was Thank You from Red & Howling, which shows a cartoon dog expressing thanks to medical staff and essential workers during the Covid pandemic. The gif has been viewed over a billion times, according to Giphy.

The CMA opened an initial investigation in January at a time when Facebook was under intense global regulatory scrutiny over competition and privacy concerns.

Following the original investigation, the CMA said that if the two companies continued to merge, it could reduce “Giphy’s incentive to expand its digital advertising, which would lead to a loss of potential competition in this market”. He added that Facebook already accounts for more than 50% of the UK’s £ 5.5 billion display advertising market.

Facebook plans to integrate Giphy into Facebook Messenger and Instagram, which it already owns. He said Giphy’s integrations with other social platforms such as Twitter, Snapchat and TikTok will not change.

A Facebook spokesperson said, “We will continue to fully cooperate with the AMC investigation. This merger is good for the competition and for the benefit of everyone who uses Giphy and our services in the UK, from developers to service providers to content creators. Giphy did not immediately respond to a request for comment.

Although Giphy and Facebook are headquartered in the United States, the CMA has the power to investigate mergers when the acquired company generates annual revenue of at least £ 70million or when the companies combined hold at least 25% of the “reasonable” market share. . The last CMA investigation is set for September 15.


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