U.K. launches antitrust investigation of Facebook-Giphy deal
The United Kingdom's competition authority announced an investigation Friday into Facebook's acquisition of Giphy, and ordered the social media giant to halt integration of the animated images platform.
Why it matters: Facebook acquired Giphy last month as antitrust enforcers both in the U.S. and around the globe have increased their scrutiny of the power of major U.S. tech companies.
Driving the news: The U.K.'s Competition and Markets Authority in an enforcement order directed the companies to operate separately as it investigates the completed acquisition.
- That includes no changes to key staff of Giphy or transferring of staff between the companies.
- The order also calls for "no integration of the information technology of the Giphy or Facebook businesses, and the software and hardware platforms of the Giphy business shall remain essentially unchanged."
- The CMA set a July 3 deadline for comment on the transaction.
What they're saying: Facebook confirms it will pause the integration of Giphy into Instagram while the companies respond. The company argues that its ownership of Giphy will pose no harm to rival tech companies.
- "Developers and API partners will continue to have the same access to GIPHY, and GIPHY’s creative community will still be able to create great content," a Facebook spokesperson said. "We are prepared to show regulators that this acquisition is positive for consumers, developers, and content creators alike."
Context: The U.K.'s inquiry come after the Australian Competition & Consumer Commission announced its own investigation into the deal this week.
- The ACCC said it will review whether the deal will provide Facebook with data that will strengthen its power in any markets or enable it to obtain data about its rivals that could reduce competition.
- In the U.S., neither the Federal Trade Commission or the Justice Department have announced an investigation. The acquisition did not trigger a mandatory merger review in the U.S.