Meta, Facebook’s parent company, has been instructed to sell off its GIF-sharing platform GIPHY by British regulator – The Competition and Markets Authority. The announcement came on Tuesday and Meta, founded by Mark Zuckerberg, is planning to appeal as the company completely disagrees with the decision. According to The Competition and Markets Authority, the reason for demanding that GIPHY be sold is because Meta’s acquisition of the online database and search engine platform could be detrimental to social media users and advertisers in the UK in the long run. According to the regulator, Meta’s acquisition of GIPHY would reduce competition between social media platforms, adding that Meta’s acquisition of the platform already took out GIPHY as a potential challenger in the display ad market.
According to the conclusion of a panel, Meta could use GIPHY to strengthen its already rooted market dominance and put other social market platforms at a disadvantage by limiting or even prohibiting their access to GIFs provided by GIPHY. In other words, Meta could monopolize GIPHY and use it to have an edge over other social media platforms.
What the “monopolization” of GIPHY by Meta could do for the company is quite endless. Apart from cutting off competition, Meta could use GIPHY to gain more traffic across all its social platforms – Facebook, Instagram and WhatsApp. In the UK alone, 73 percent of time spent on social media by people are spent on platforms owned by Meta. Meta could take it up a notch by changing the terms of access to GIPHY and requesting that other social platforms provide more user data for access to GIFs provided by GIPHY.
GIPHY was founded in February 2013 and is an American online database and search engine that allows users to search for and share short looping videos with no sound, according to Wikipedia. Facebook, now Meta, acquired the platform on the 15th of May 2020 for about $400 million.
Before its acquisition by Meta, GIPHY was planning to expand to countries outside of the US after it launched its advertising services. With its ad services, brands could make promotions through visual images and GIFS. But Facebook happened…
According to the British regulator, GIPHY’s ad services, on its own would have been a strong competitor against Facebook/Meta’s. It would have provided other platforms with the confidence they needed against big names like Meta. Following its acquisition, Meta shut down GIPHY’s ad services. According to what the Competition and Markets Authority said, this was a huge cause for concern, especially because Meta is headlining the ad market in the UK; it controls almost half of the $9.4 billion display ad market in the UK.
“By requiring Facebook to sell Giphy, we are protecting millions of social media users and promoting competition and innovation in digital advertising”, Stuart McIntosh, the Chairperson of the independent inquiry group in charge of the investigation said, hinting that the deal has already removed a potential challenger in the display ad market.
“We disagree with this decision. We are reviewing the decision and considering all options, including appeal”, a Meta Spokesperson said. It is still not clear how long Meta has to sell GIPHY but an appeal is expected to take place soon.
Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behaviour or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional
Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
