UK competition watchdog launches investigation into Facebook’s $400M acquisition of Giphy – ClearTipsNews

Facebook wants to be the go-to platform for all your social needs, but one big step it took last month to take over the world of GIFs – the short loop videos that people use to express their feelings in online conversations – may not go as he hopes. The UK Competition and Markets Authority – the country’s antitrust watchdog – announced today that it has launched an investigation into the acquisition of Giphy by Facebook, the popular GIF repository and search engine it announced last month that she was going to acquire, supposedly for 400 million dollars, to integrate. in his Instagram team. Specifically, he is looking to see how and if the deal will reduce competition in the respective markets of the two companies.

“The Competition and Markets Authority (CMA) is examining whether it is or could be the case that this transaction resulted in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of this situation should result in a substantial lessening of competition in one or more markets in the United Kingdom for goods or services, “he noted in the announcement.

The CMA is now opening the file for third party comments, which must be submitted by July 3, 2020.

The CMA further noted that, although its investigation is ongoing, Facebook cannot continue the activities related to the acquisition unless it has received prior written approval from the CMA. This includes product integration, team integration, working on commercial agreements or contracts together. Facebook and Giphy have both confirmed to the CMA that they are complying with the order.

GIFs are so ubiquitous on the web, and so easy (and free) to import and use, that the business model behind them is not so obvious, so it may seem strange to hear about an antitrust complaint. linked to the acquisition of a GIF Platform. However, this is Facebook – a company that has long been in the crosshairs of competition regulators in the United States and Europe – and for what it’s worth, even without a lot of money involved (yet), Giphy is huge when it comes to researching and using GIFs.

And GIFs should play an important role in Internet business, generally and more directly.

On a direct level, although Giphy has so far made no money, there is an obvious opportunity to move into the field of sponsored GIFs, and more services to create and distribute GIF-based content. . For a company like Facebook looking for more innovative and diverse advertising formats that work in a social media context, the appeal of a popular platform to fulfill this business vision is obvious.

On a more general level, they are a key way to create more engagement in social media, another major goal of Facebook – again, as a way to fuel more audience and eyeballs to generate more publicity. The two already had an integration before Facebook decided to buy it: 50% of Giphy’s traffic came from its integrations with Facebook properties Instagram, Messenger and WhatsApp, as well as Facebook itself, explaining how use cases were linked are already for both.

Facebook has already been investigated by the CMA for mergers, although it has never really been difficult to go through one. Perhaps the most notable is the acquisition of WhatsApp, the hugely popular messaging platform, for $ 19 billion: given the continued growth of both platforms and Facebook, you can argue that there has been an antitrust regret about the tetherless nod. that the agreement was made when it was made – which resulted in fines after the fact. It will therefore be interesting to see if the CMA exercises more foresight, or at least better hindsight, with this agreement rather than simply reviewing the motions.

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