Competition watchdog to investigate Facebook’s Giphy acquisition
The Competition and Markets Authority (CMA) has today begun an investigation into the completed acquisition of Giphy by Facebook.
An initial enforcement order was sent earlier this week as the CMA conducts an inquiry into whether the merger of Facebook and Giphy will “result in a substantial lessening of competition within any market or markets in the United Kingdom”.
Facebook bought Giphy last month in a deal worth a reported $400m. Approximately half of all traffic on Giphy’s apps already come from Facebook products such as Whatsapp and Instagram.
The CMA has now opened the case up for comments, to be submitted by 3 July.
While Giphy will continue to operate its own library, Facebook said in May that it intends to further wrap the app into Instagram “so that people can find just the right way to express themselves”.
Giphy’s library is also embedded into a wide variety of apps and platforms outside of Facebook, such as Twitter, Slack and Apple’s iMessage.
Vishal Shah, vice president of product, said at the time: “People will still be able to upload GIFs; developers and API partners will continue to have the same access to Giphy’s APIs; and Giphy’s creative community will still be able to create great content.”
Acquisitions by tech giants are currently under significant scrutiny globally. In the US, the Federal Trade Commission announced earlier this year that it would be requesting information on all acquisitions by tech firms for the past decade.
A spokesperson for Facebook said today: “Giphy improves Instagram’s offerings by giving people more features and tools. Developers and API partners will continue to have the same access to Giphy and Giphy’s creative community will still be able to create great content.
“We are prepared to show regulators that this acquisition is positive for consumers, developers, and content creators alike.”