The UK competition watchdog today gave social media giant Facebook and Giphy 5 working days to offer proposals to address its concerns over the companies’ merger deal, as reported by Reuters.
The initial investigation of the United Kingdom’s Competition and Markets Authority (CMA) began in January when Facebook faced international antitrust scrutiny.
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The investigation found that Facebook’s former rival Giphy had plans to expand its digital advertising partnerships to other countries including the United Kingdom.
“If Giphy and Facebook remain merged, Giphy could have less incentive to expand its digital advertising,” said the regulator authority. ‘’This is particularly concerning given Facebook’s existing market power in display advertising – in July, last year, the CMA found that Facebook has a share of over 50% of the £5.5 billion display advertising market.’’
In May 2020, Facebook acquired Giphy for $400 million to integrate it with Instagram. However, the social media giant reportedly stopped the integration in June.
Meanwhile, Facebook had said that there wouldn’t be any changes in Giphy’s integrations with other social media platforms including TikTok, Twitter and Snapchat.
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“This merger is good for competition and in the interests of everyone in the UK who uses Giphy and our services – from developers to service providers to content creators,” a Facebook spokesperson said, adding that the company will work together with the probe. (Reuters)