The CMA said it may require Facebook to unwind the deal, which is reportedly worth $400 million, and sell off Giphy if its competition concerns are ultimately confirmed. “Facebook’s ownership of Giphy could lead it to deny other platforms access to its GIFs”, the CMA said.
McIntosh said the deal also removes a “potential challenger” to Facebook in the £5.5 billion display ad market.
“While our investigation has shown serious competition concerns, these are provisional,” McIntosh said.
“We will now consult on our findings before completing our review. Should we conclude that the merger is detrimental to the market and social media users, we will take the necessary actions to make sure people are protected.”
A Facebook spokesperson told CNBC that the company disagrees with the CMA’spreliminary findings.
“As we have demonstrated, this merger is in the best interest of people and businesses in the UK — and around the world — who use GIPHY and our services,” the spokesperson said. “We will continue to work with the CMA to address the misconception that the deal harms competition.”
“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,” a Facebook spokesperson said in May 2020.
“We are prepared to show regulators that this acquisition is positive for consumers, developers, and content creators alike.”
