Meta, the parent of Facebook, has been told by a UK competition watchdog that it should sell GIFHY GIF-sharing platform.
The competition officials and markets, said that the deal could hurt end users of the social media platform and UK advertisers. Meta has stated its opposition to the decision and is considering an appeal.
The regulator concluded that the Meta acquisition of GIPHY will reduce competition between communication platforms. He added that the deal had already removed GIPHY as a potential source of challenge for the show’s advertising market.
The panel found that Facebook will be able to increase its already significant market power in relation to other social media platforms by restricting or limiting other forums to access GIPHY GIFs. This will send more traffic to Facebook-managed sites such as Facebook, WhatsApp and Instagram already comprising 73% of user time spent on social media platforms UK panel concluded.
The Meta may also modify the GIPHY GIF access rules according to the CMA specified. For example, it may require the likes of TikTok, twitter and Snapchat to provide additional user data to access GIPHY GIFs.
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Meanwhile, prior to the agreement in May last year, GIPHY introduced its own advertising services and considered expanding outside the U.S. including U.S. advertising services. GIPHY allowed firms like DUNKIN to promote their products with visual images and GIFs.
The CMA has found that GIPHY’s advertising services would be able to end with Facebook’s own advertising resources, while also promoting new innovations from other social networking sites.
When the agreement was announced, Facebook said it would integrate GIPHY into the Instagram app so people could find the right way to express themselves. It said Facebook had significantly reduced the scope of those updates despite repeated warnings.
