Facebook Giphy acquisition: UK regulators might unwound deal amid antitrust case

In response to concerns by regulators in the UK, Facebook might have to give up on Giphy and the massive collection of GIFs it has. GIFs or animated images are used by millions of users across the world to express their emotions and sentiments. According to a recent development in the UK antitrust case, regulators have raised concerns about the acquisition and say that it might reduce competition in social media and advertising, creating a monopoly for Facebook. 

Facebook Giphy acquisition alerts UK regulators

The United Kingdom's Competition and Markets Authority, also called CMA says that the acquisition might result in Giphy being controlled by Facebook and removing or limiting access to other social media platforms to Giphy's content. Giphy is currently being used by multiple social media services like iMessage, Slack, Twitter and Snapchat. While Facebook announced the deal, the company also mentioned that it will grant third party access to Giphy's content as it was before the merger. The provisional finding strengthens the case against Facebook and comes at a time when the American company is already facing global scrutinies.

Facebook spent around $400 million for acquiring Giphy. However, the acquisition might be the first deal to be unwrapped by regulatory bodies. In a report published by CNN Business, a Facebook spokesperson said that the Facebook-Giphy merger serves the best interest of people and businesses in the United Kingdom and around the world. The spokesperson also adds that Facebook will continue to address the antitrust case and work with the Competition and Markets Authority to clarify the misconception about the deal harming competition. 

Facebook's acquisition led to Giphy abandoning its plans of expanding in the United Kingdom

On the other side, CMA also says that Giphy had plans to explain its advertising business in the United Kingdom before Facebook acquired them. If Giphy would have expanded in a similar manner it intended to, UK-based brands would have benefitted from the situation as they would get a new way to advertised and promote themselves, providing direct competition to Facebook. In a blog post, CMA also mentions that "Facebook terminated Giphy's paid advertising partnerships following the deal, meaning an important source of potential competition has been lost."  Further, a final decision upon the issue is expected by October 6, 2021.