After an investigation, the British regulator blocks the purchase of the gifs website by the platform on the understanding that it reduces competition and increases the concentration of power
Facebook will have to sell Giphy, the largest website in gifs cartoons that he bought last year for $ 400 million. This was ruled this Tuesday by the competition authority of the United Kingdom in an order in which he asks to block the acquisition and to force Meta, parent company of the red social, to get rid of it. “The acquisition (of Giphy) could reduce competition between platforms and increase the already significant market power of Facebook & rdquor;” he said.
The decision of the Competition and Markets Authority of the United Kingdom represents an unprecedented milestone, since for the first time a national body is mobilized to cancel a purchase transaction carried out by one of the tech giants from Silicon Valley. That is because he understands that the laws of competence nationals and leading to a concentration of power excessive.
Giphy is the largest provider of animated gifs for different social networks such as Twitter, TikTok O Snapchat. In addition, the web allows you to track how and where each gif is shared, creating a map of its use and the mood they represent. For Facebook, that turned into a golden opportunity to have even more data on the behavior of its users, now outside its traditional platforms.
We’ve directed #Facebook to sell Giphy after finding the takeover could reduce competition between social media platforms and increase Facebook’s already significant market power. pic.twitter.com/yRaPxMR43z
— Competition & Markets Authority (@CMAgovUK) November 30, 2021
Threat to competition
Thus, the social media giant launched into buying the web, but after doing so the British regulator opened an investigation to determine if it could violate national laws. This past August, the agency came to the conclusion that the acquisition reduced competition in the social media and advertising markets, a business worth more than 8.2 billion euros of which Facebook already controls about half.
The regulator points out that Meta could use its new acquisition to limit the supply of gifs to competing platforms, demand more data from Giphy users and redirect more traffic to its networks (Facebook, Instagram, WhatsApp& mldr;), which already take up 73% of the time that British people spend online.
London thus understands that with the decision to force the sale of Giphy it prevents Meta from “increasing its important power in social networks & rdquor ;, thereby” protecting millions of users & rdquor; of that digital market. Meta has said that the decision of the British regulator sends a “chilling message & rdquor; for entrepreneurs.
In October, the UK competition authority fined Meta € 59.2 million after it refused to provide information showing that it had followed the order to keep Giphy’s business separate from Facebook’s during the investigation. The regulator’s director of mergers, Joel Bamford, then made clear a position that can be normalized with big technology: “This serves as a warning to any company that thinks it is above the law & rdquor ;.