a logo of Giphy and Facebook

After warning that Facebook’s contract of $400 million to purchase Giphy in May 2020 would harm the social platform competition and remove a possible competitive player on the digital publicity market, the Competitive and Market Authority (CMA) decided to intervene. 

Facebook and Their Plans

Facebook acquires Giphy For $400 Million, and plans to integrate its GIF  library into Instagram / Digital Information WorldFacebook acquires Giphy For $400 Million, and plans to integrate its GIF  library into Instagram / Digital Information World

“Giphy’s takeover may see Facebook remove GIFs from rival sites or need more user data to access them,” stated CMA Independent Investigative Group leader Stuart Mcintosh. “To the £5.5 billion display advertising industry, it also removes a possible Facebook rival. None of this would be customers’ good news.” 

In June, the CMA stated it plans to probe the Facebook acquisition of Giphy. Worries of Facebook shutting out the million short looping animations that have become one of TikTok, Snapchat, and Twitter architectures. Facebook pledged to continue accessing Giphy to compete for social networks but stated that it wanted to add the firm. 

Alarm About Acquiring

The UK antitrust authority voiced alarm also over the British digital advertising market domination of Facebook. It claims to have a 50% interest in the $7.6 billion (£5.5 billion) business. The CMA has informed Giphy that it has sold advertising to businesses such as Dunkin’ Donuts and Pepsi. Still, The CMA stopped this sort of contract following the purchase by Facebook, which reduces competition and innovation. 

Antitrust authorities are deciding the United Kingdom, Europe, and the United States to acquire Silicon Valley tech titans in particular. In June, Facebook won two monopolistic proceedings against FTC that tried to stop it from taking over Instagram and Whatsapp. 

In Giphy’s lack of UK income at the acquisition, Facebook questions whether the CMA was responsible for takeover intervention. The Menlo Park, the California social network, argued that Giphy had “no substantial public for adversity.” They think it should not have been classified as a possible rival, therefore continuing to provide access for other firms to Giphy’s GIF database. 

“We disagree with the early conclusions of the CMA, which we do not think evidence supports. As we have shown, this combination is in the most significant interest of those who use Giphy and our services in Britain.” In a statement, a Facebook corporate spokesman stated that we continue to engage with the CMA on the wrong idea that the arrangement is harmful to competition.