On 12 August 2021, The Competition and Markets Authority ("CMA") announced its provisional findings that Facebook's completed acquisition of Giphy is likely to harm competition between social media platforms and between digital display advertising players.

The CMA considers that Facebook could restrict the use of GIFs on other social media platforms, making its competitors change the access terms and pass on more user data in order to access GIFs. This would ultimately lead to end users choosing Facebook over competing platforms because of the reduction in GIF choice and quality.

Additionally, the CMA noted that Giphy had offered paid advertising in the US which enabled other companies to promote themselves and to expand their business to other countries, including the UK.This means that the deal could also eliminate a serious competitor to Facebook in the UK display advertising market, where Facebook has control of over 50%.

If the CMA's findings are ultimately confirmed, it may force Facebook to unwind the deal, which closed in June 2020 and is reportedly worth $400 million, and to sell Giphy to prevent harm to competition. The final CMA report will be published by 6 October 2021.

The CMA is encouraging responses from interested parties to its provisional findings by 2 September 2021 and to its notice of possible remedies by 25 August 2021.

The CMA press release can be found here.

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