Many know that Facebook, Instagram and WhatsApp are owned by Meta but the firm has acquired some 92 companies in its time, many of them you’ve likely never heard of.
One company who you have likely heard of is Giphy, a repository of gifs that Facebook, now Meta, acquired in 2020.
Today however, the Competition and Markets Authority (CMA) in the UK ordered Meta to reverse this acquisition.
The CMA says that it has concluded that Meta’s acquisition of Giphy would allow Meta to gain an even stronger hold on the UK market. Furthermore, the CMA states that Meta could further strengthen its position by limiting access to Giphy by other social media platforms using the provision of more user data as a way to get access to the Giphy gif repository.
“The tie-up between Facebook and Giphy has already removed a potential challenger in the display advertising market,” chair of the independent inquiry group, Stuart McIntosh said.
“Without action, it will also allow Facebook to increase its significant market power in social media even further, through controlling competitors’ access to Giphy GIFs,” McIntosh added.
Meta has yet to respond but we suspect the firm will appeal this decision.
The CMA launched an investigation into the acquisition of Giphy in June 2020. Back in March, the CMA concluded “that it is or may be the case that this merger may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.”
Despite the CMA ordering Meta and Giphy to not take any action which would integrate Giphy into Facebook, transfer ownership or control of Facebook or Giphy, this order was seemingly ignored. As a result, in October Meta was fined £50.5 million
“Given the multiple warnings it gave Facebook, the CMA considers that Facebook’s failure to comply was deliberate. As a result, the CMA has issued a fine of £50 million for this major breach, which fundamentally undermined its ability to prevent, monitor and put right any issues,” the CMA said in October.
Meta said that it disagrees with the CMA’s earlier findings and that the merger is in the best interest of people and businesses in the UK. However, the CMA highlights a legitimate concern in that Giphy is used by a variety of platforms and Meta could force those platforms to toe the line it sets. With Meta already accounting for up to 50 percent of the display advertising market in the UK, adding further fuel to the fire sounds like a bad idea that could indeed lead to lower competition in the UK.
You can read about the CMA’s investigation into this matter in full here.
