According to CMA, Facebook may be violating competition laws with the acquisition. The authority will now investigate whether the deal could “result in a significant decrease in competition in any markets”.
The company led by Mark Zuckerberg was notified of the opening of the investigation on June 9. The British competition authority also explains that Facebook will not be able to proceed with purchase-related activities, including product or team integration, while the scrutiny process is open. Both companies have already confirmed to the CMA that they will comply with the orders indicated.
Remember that Facebook has been using Giphy’s APIs on its platforms for some time now, including Messenger or WhatsApp. When announcing the purchase, the company explained that Facebook, for example, is responsible for 50% of all Giphy’s daily traffic. Instagram is responsible for about 25%.
Facebook clarified that it does not plan to make the GIF sharing platform an exclusive service and that the Giphy ecosystem will remain open to all users and content creators. Developers, including those who have partnerships with companies such as Twitter, Slack, Skype, TikTok, Tinder and Samsung will also continue to have access to the vast library of content on the platform.
The acquisitions made by Facebook have been previously investigated by entities such as the European Commission. When the company bought WhatsApp in 2014 for $ 19 billion, European competition authorities came together to analyze the impacts of the combination of the two services. After almost three months of analysis, Brussels ended up giving the business a “green light”.