Facebook Blasts Britain’s Concerns About Its Giphy Acquisition

Facebook made an argument against selling Giphy in response to Britain’s Competition and Markets Authority (CMA), after the British regulator flagged access and competition concerns that would arise from the social media platforms joining forces.

“The inability of the CMA (Competition and Markets Authority) to issue any order against Giphy raises serious questions as to the enforceability of any divestment order and whether any such order could be effective,” Facebook officials wrote in a letter published by the CMA on Wednesday (Sept. 7), according to a Reuters report.

CMA last month suggested that Facebook might need to spin off the recently acquired Giphy based on its preliminary findings that showed the merger would cause harm to the display ad market and other social media networks.

“Our preliminary view was that full divestiture of Giphy would represent a comprehensive and effective remedy,” a CMA spokesperson said. “However, we will consider any behavioral remedies put forward as part of our consultation.”

The social media giant bought Giphy last year for $400 million, with plans to add its animated GIF-making capabilities to its Instagram platform. The CMA has been looking into the deal since January. Facebook said that CMA’s preliminary findings had what it called “fundamental errors.”

According to Facebook officials, Giphy will continue to integrate with Twitter, Snapchat and TikTok after the acquisition is finalized, but the CMA findings expressed concern that access to Giphy would come with the price of giving up user data. The CMA is expected to rule on the matter in October, and Facebook could appeal the decision.

Related news: Facebook/Giphy Merger Worries UK Competition Watchdog

“Millions of posts every day on social media sites now include a GIF,” the CMA said in a news release last month. “Any reduction in the choice or quality of these GIFs could significantly affect how people use these sites and whether or not they switch to a different platform, such as Facebook. As most major social media sites that compete with Facebook use Giphy GIFs, and there is only one other large provider of GIFs – Google’s Tenor – these platforms have very little choice.”