UK regulator may force Facebook to sell Giphy

It would be the first time the CMA has told a tech giant to reverse an acquisition

The UK's competition regulator is expected to go through with blocking Facebook's acquisition of GIF platform Giphy, according to the Financial Times.

The Competition and Markets Authority first announced its interest in the case about a year after Facebook (via its new parent company, Meta Platforms) acquired Giphy in May 2020.

At the time the regulator said, 'Facebook's merger with Giphy will harm competition between social media platforms and remove a potential challenger in the display advertising market.'

The FT's sources now claim that the CMA will 'reverse' the deal - the first time it has forced a tech giant to undo an acquisition.

The CMA had provisionally ruled against Facebook in August, arguing that Giphy is the world's largest provider of GIFs. The social media giant could potentially use the acquisition to limit rivals' access to GIFs.

Giphy had also launched an early foray into the display advertising business in the USA and was considering rolling it out to the UK. Facebook - which owns as much as half of the UK's display advertising business - shut down the experiment post-acquisition.

There has been no official word from Facebook in response to the FT's claims yet. However, the company called the CMA's initial proposal 'grossly unreasonable and disproportionate' in September.

The CMA fined Facebook £50.5 million in October, for a 'major breach' of its order that the company remain separate from Giphy during the investigation.

Regulators around the world, and especially in the UK and EU, are increasingly wary of big tech firms' rapid acquisition-fuelled expansions, and many are seeking to curb the power of companies like Google, AWS and Facebook.