Facebook added Giphy to its family only a year ago, but an investigation by the UK regulator could result in the social media site letting go of the GIF giant.
The United Kingdom’s competition regulator has placed a question mark over the future of Giphy as a Mark Zuckerberg company. The Competition and Markets Authority (CMA) on Thursday said it provisionally found Facebook’s merger with Giphy harmed competition between social media platforms and removed a potential challenger in the display advertising market. If the CMA’s concerns are confirmed, Facebook could be required to unwind the deal and sell Giphy off. Facebook scooped up the GIF giant in May 2020, with the deal estimated to be worth around $400 million. In making the announcement, Facebook argued 50% of Giphy’s traffic already came from the Facebook family of apps, and half of that just from Instagram. But the CMA believes the takeover would negatively impact competition between social media platforms. „Millions of posts every day on social media sites now include a GIF. 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,“ the CMA wrote.
