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Facebook parent Meta must sell GIF-sharing platform Giphy to avoid potential harm to consumers and marketers, Britain’s competition watchdog said on Tuesday.
The previously completed deal, which had been unveiled in May 2020, “may give rise to competition concerns in both the supply of display advertising in the U.K. and in the supply of social media services worldwide, including in the U.K.,” the Competition and Markets Authority (CMA) said.
Meta said it disagrees with the decision and that will consider its options, including a potential appeal.
The regulator’s panel argued that the deal, reportedly worth $400 million, has removed Giphy as a potential challenger to Meta/Facebook in the display advertising market. It could also allow the social media giant to deny or limit rivals’ access to Giphy GIFs, it argued. The reason for that is that Facebook shuttered Giphy’s ad services at the time of the merger. According to the CMA, Facebook controls nearly half of the £7.0 billion ($9.4 billion) display ad market in Britain.
“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 inquiry group carrying out the CMA probe.
Facebook previously said about the deal: “We are prepared to show regulators that this acquisition is positive for consumers, developers and content creators alike.”
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