Meta has been heavily advised to sell the GIF-making service by U.K. regulator and authorities.
Ah, the mighty GIFS—from Nyan cat to the classic Bachelor GIFs—so easy to use them, until one company threatens this easily accessible service. Facebook’s parent company, Meta, is under advisement that it is required to sell the GIF-sharing platform, Giphy. The Competition and Markets Authority (CMA) believes that if the company holds on to the acquired GIF-service, it could harm social media users and United Kingdom (U.K.) advertisers. This is because the CMA sees their ownership as a move that would only drive more traffic to their own social media-owned properties like Facebook, WhatsApp and Instagram. Of course, Meta disagrees and seeks to appeal the request.
Back in 2020, Facebook bought Giphy for around $400 million with hopes that the GIF service would be integrated into Instagram. This would make it easier for users to find the right GIFs they need for stories and direct messages.
The CMA stated, “After consulting with interested businesses and organizations — and assessing alternative solutions … put forward by Facebook — the CMA has concluded that its competition concerns can only be addressed by Facebook selling Giphy in its entirety to an approved buyer.” Essentially, Meta’s competitors like TikTok, Twitter and Snapchat would be at risk of being cut off or extremely limited access to GIFs as long as the social media giant maintains control of Giphy.
The tech company responded, along with the appeal, “Both consumers and Giphy are better off with the support of our infrastructure, talent, and resources. Together, Meta and Giphy would enhance Giphy’s product for the millions of people, businesses, developers and API partners in the UK and around the world who use Giphy every day, providing more choices for everyone.”
As much as Meta’s statement can hold true, the former name and brand of the company promised better security measures for its users for a long time and has still been said to have been working on it. A lot of promises are still waiting to be answered.
The CMA also noted that Giphy was going to launch modern advertising services by expanding into other countries like the U.K. with using GIFs to promote brands—such as Dunkin’ Donuts and Pepsi. However, if Meta owns all this GIF power, brands may not get the freedom to use this service as freely as they would like to prior to when Giphy was an individual entity. The CMA reported that Facebook immediately paused this new Giphy service as soon as they acquired it.
The CMA recognizes that Facebook already holds about $9 billion in display marketing in the U.K. alone and taking GIFs away from competitors would only increase this marketing power beyond comprehension. This dispute has already cost Meta a whopping $70 million in fines back in October when the company repeatedly ignored warnings and knowingly broke rules during the investigation.