Brexit ‘has been a success’ says Lee Anderson
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The UK’s competition watchdog has told Facebook’s parent company Meta to sell GIF-sharing platform Giphy. The Competition and Markets Authority (CMA) said the decision was “protecting millions of social media users and promoting competition and innovation in digital advertising”.
Apart from an ongoing investigation in Austria, no European competition authority has said it is looking at the deal.
Alexandre de Streel, academic co-director at the CERRE think tank, told Politico: “It is clear that the UK is in a way a bit more advanced than the EU so far in this idea of a comprehensive approach to merger review.”
European lawmaker Paul Tang added: “It’s good that the UK takes the lead and sets an example.
“It’s about time Europe gets a grip on killer acquisitions too.”
The CMA’s decision on Meta’s takeover of Giphy was announced earlier this week.
The independent CMA panel reviewing the merger concluded that the deal had increased Meta’s already significant market power by denying or limiting other platforms’ access to Giphy GIFs, driving more traffic to Meta-owned apps and changing the terms of access by requiring some rival platforms to provide more user data in order to access Giphy.
The competition watchdog said the deal also removed Giphy as a potential challenger in the display advertising market after its investigation found that before the merger Giphy’s advertising services had the potential to compete with Facebook’s own ad business by allowing companies to promote their brands through images and GIFs.
The CMA said Facebook terminated Giphy’s advertising services at the time of the merger, something it considered “particularly concerning” given that Facebook controls nearly half of the £7billion display advertising market in the UK.
Stuart McIntosh, chairman of the independent inquiry group which carried out the investigation, said: “The tie-up between Facebook and Giphy has already removed a potential challenger in the display advertising market.
“Without action, it will also allow Facebook to increase its significant market power in social media even further, through controlling competitors’ access to Giphy GIFs.
“By requiring Facebook to sell Giphy, we are protecting millions of social media users and promoting competition and innovation in digital advertising.”
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In response, a Meta spokesperson said: “We disagree with this decision.
“We are reviewing the decision and considering all options, including 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.”
It comes after the CMA last month fined Facebook £50.5million after failing to provide enough important information to the competition regulator investigating the Giphy takeover.
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