Facebook’s Acquisition of Giphy Is Under New Review

The deal, reportedly worth $400 million, is also under scrutiny from Australian regulators

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Facebook bought Giphy for a reported $400 million last month. Facebook, Giphy
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Facebook will temporarily halt integrating popular GIF database Giphy into its company, according to a source familiar with the situation, after the U.K.’s antitrust authority said it would investigate whether the acquisition is anti-competitive.

The British Competition and Markets Authority confirmed Friday that it would investigate whether the acquisition will result in the “substantial lessening of competition within any market or markets in the United Kingdom for goods or services.” While the probe has yet to begin, the government entity is currently seeking public comments.

Giphy was set to be absorbed by Instagram, which is owned by Facebook. Fifty percent of Giphy’s traffic comes from Facebook-owned applications, and half of that is directly from Instagram, Facebook vp of product Vishal Shah wrote in a blog post in May.

Facebook told Adweek that it will cooperate with the antitrust probes, and user developers’ access to Giphy will not change.

“Giphy improves Instagram’s offerings by giving people more features and tools,” a Facebook spokesperson said. “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. We are prepared to show regulators that this acquisition is positive for consumers, developers and content creators alike.”

Britain’s inquiry into the vertical deal, reportedly valued at $400 million, follows Australia’s own investigation, which was announced earlier this week. The Australian Competition and Consumer Commission (ACCC) said Monday it was concerned with the deal. 

“This is not just any old GIF supplier, it’s the biggest, most important one and given that, we were surprised that we weren’t notified by Facebook of this acquisition,” ACCC chairman Rod Sims told the Sydney Morning Herald. “If, when we look at it, we do have concerns, then we obviously need to take court action.”

So far there has been no action from U.S. regulators in response to the deal, but Facebook confirmed last year that it is under antitrust investigation by the Federal Trade Commission.

@ScottNover scott.nover@adweek.com Scott Nover is a platforms reporter at Adweek, covering social media companies and their influence.
Publish date: June 12, 2020 https://dev.adweek.com/digital/facebooks-acquisition-of-giphy-is-under-new-review/ © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT