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UK competition regulator has asked owner of Facebook Meta Platforms to sell moving image platform Giphy after discovering acquisition could harm UK social media users and advertisers, dealing a blow to giant American technology.
The Competition and Markers Authority (CMA) said on Tuesday the move was in line with tentative findings that Facebook’s acquisition of Giphy in May last year would reduce competition between social media platforms and on the display advertising market.
Facebook, recently rebranded as Meta Platforms, said it could appeal the CMA’s decision.
This is not the first time that AMC has been involved in a major merger. In February, he said Viagogo had to sell part of Stubhub’s international business because their merger would reduce competition in the UK.
âThe merger between Facebook and Giphy has already eliminated a potential challenger in the display advertising market,â said Stuart McIntosh, chairman of the independent Facebook-Giphy investigation for the AMC.
“By forcing Facebook to sell Giphy, we are protecting millions of social media users and promoting competition and innovation in digital advertising,” he added.
Facebook said it disagreed with the decision.
“We are reviewing the decision and considering all options, including the appeal,” a spokesperson for Meta said in a statement.
In October, the CMA fined the company around $ 70 million for violating an order imposed during its investigation into the deal, after hinting in August that it might need Facebook to sell. Giphy.
The CMA began an investigation into the deal in January this year and referred it in April to a full investigation.
Facebook bought Giphy, a website for creating and sharing animated images, or GIFs, for $ 400 million in May 2020 to integrate it with its photo-sharing app, Instagram. He defended the agreement and its proposals at the CMA on Giphy.
Google’s Tenor is another major GIF provider.
The CMA is actively studying the monopoly of major technologies.
Alphabet Inc’s Google last week pledged to further restrict its use of its Chrome browser data to address CMA’s concerns about plans to ban third-party cookies that advertisers use to track consumers.
The Financial Times first reported on the CMA’s plans to block the Facebook-Giphy deal.