Last month, Facebook acquired Giphy, the GIF Making app, for $400 million. The takeover is now under investigation by the UK’s competition authority.
As reported, the GIFs are popular on Facebook apps, but the company has been providing the animations to Facebook’s competitors such as Twitter, TikTok and Snapchat.
The UK Competition and Markets Authority is investigating whether the takeover could be a problem under the circumstances; and whether the acquisition “may be expected to result in a substantial lessening of competition.”
At the announcement of the acquisition a few weeks ago, a lot of concerns were raised about the Facebook-Giphy Deal, with regard to the level of access Facebook would gain on its competitors’ data through the service.
The Republican Senator for Missouri, Josh Hawley, commented that, “Facebook keeps looking for even more ways to take our data…Facebook wants Giphy so it can collect even more data on us.
The enforcement by the CMA means that Facebook cannot initiate a takeover of Giphy and has to keep the Staff and Technology separate from its company, until they get express and written permission from the CMA, which has invited comments from the public until July 3.
Facebook said it plans to roll Giphy into its Instagram team, where the GIFs and stickers are most popular. According to a Facebook Spokesperson, Giphy “improves Instagram’s offerings by giving people more features and tools.”
They also set to clarify that the acquisition would not affect its competitors, as they would still have access to Giphy on their platforms.
“We are preparing to show regulators that this acquisition is positive for consumers, developers and content creators alike,” they said.
Facebook’s merger with Instagram was also investigated by the office of Fair Trading in 2012.