Facebook’s Takeover of Giphy Raises Competition Concerns, U.K. Says

U.K. antitrust officials said they could call on Facebook Inc. to unwind its acquisition of Giphy, a provider of popular animated images, after provisionally finding that the deal would harm competition between social-media platforms and in the display advertising market.

Facebook bought Giphy last year, saying it planned to integrate its offering into Instagram and other apps. Giphy allows users to search for, create and share animated images known as GIFs, which stands for graphics interchange format.

The U.K.’s Competition and Markets Authority began probing the deal in June 2020 and launched an initial investigation in January. On Thursday it said it would now seek responses from interested parties to its provisional findings and issue a final report on Oct. 6. The CMA added that if its competition concerns are ultimately confirmed, it could require Facebook to sell off Giphy in its entirety.

Facebook said it disagreed with the CMA’s preliminary findings and that it would work with the regulator to “address the misconception that the deal harms competition.”

The CMA said that millions of daily posts on social media include GIFs and that any reduction in choice or quality of images could affect how people use the sites, and whether they might switch to another platform.