UK Regulator Orders Meta to Sell Giphy

The UK’s Competition and Markets Authority (CMA) ordered Facebook owner Meta to sell graphics maker Giphy. The ruling, completed in 2020, says that Facebook's ownership of the service reduces competition in the social media and display advertising markets following a long-running investigation.

A probe was commenced by the CMA shortly after the deal completed in May 2020. Facebook was then blocked from integrating assets with its subsidiary Instagram while the investigation took place. The CMA explained an independent panel reviewing the merger concluded Facebook would be able to increase its already significant market power by denying or limiting other platforms’ to access Giphy’s Graphic Interchange Format (GIF) images and drive more traffic to its own sites including WhatsApp and Instagram.

The CMA added Facebook could change terms of access by requiring rivals such as TikTok and Twitter to provide more user data in order to access Giphy. The panel also raised concerns about the removal of Giphy in the display advertising market, which it asserted would have been a competitor to Facebook had it remained a separate company. “By requiring Facebook to sell Giphy, we are protecting millions of social media users and promoting competition and innovation in digital advertising,“ said Stuart McIntosh, chair of the independent enquiry group.