Why will the British Antitrust Authority ask for Giphy’s spin-off from Facebook?
The UK competition authority is investigating Facebook's takeover of Giphy and could force a spin-off. All the details
The UK could force Facebook to divest Giphy, the platform that allows users to create, search and share GIF files.
THE ANTITRUST INVESTIGATION
The British regulator has investigated Facebook's acquisition of Giphy and concluded that the agreement would damage the display advertising market, i.e. advertising on Internet sites made up of banners or videos that play automatically.
THE ACQUISITION OF GIPHY
Facebook, the world's largest social media company , bought Giphy in May 2020 with plans to integrate the platform into Instagram. The deal was valued at $ 400 million.
DAMAGE TO COMPETITION?
The UK's competition authority, the Competition and Markets Authority (CMA), began looking into the Giphy acquisition last January and launched an in-depth investigation in April.
Stuart McIntosh, head of the CMA investigation, said the acquisition of Giphy "removes a potential competitor to Facebook" and could lead the company to withdraw GIFs from rival platforms or require users to hand over more personal data to be able to you. To have access.
Besides Giphy, another major platform for GIFs is Tenor, which is owned by Google.
GIPHY'S (CASTRATED) PLANS ON ADVERTISING SERVICES
The CMA says that, prior to the deal with Facebook, Giphy was considering offering its paid advertising services in countries other than the United States, such as the United Kingdom, for example. After the acquisition, however, Facebook canceled Giphy's advertising partnerships.
THE FACEBOOK COMMENT
Giphy did not comment. A Facebook spokesperson, on the other hand, said the company disagrees with the findings of the CMA investigation and thinks they are “not backed up by evidence. As we have shown, this merger is in the best interest of people and companies in the UK and around the world ”.
IS A REFORM OF THE ANTITRUST RULES NECESSARY?
The "classic" antitrust toolkit, which assesses the damage inflicted by the company on consumers on the basis of the price they have to pay to use goods and services, does not seem to adapt well to the new context created by the digital economy, where practically each platform is free.
THE NEXT STEPS
The CMA said it has initiated discussions with other agencies regarding the review of its investigation into the Facebook-Giphy deal. It also solicited comments from interested parties by 2 September next.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/facebook-giphy-indagine-antitrust-regno-unito/ on Fri, 13 Aug 2021 08:30:01 +0000.