LONDON (Reuters) – Britain’s competition watchdog today gave Facebook and Geoffy five working days to submit proposals to address their concerns about the merger that could affect digital advertising and the provision of motion pictures.
The UK Competition and Markets Authority launched a preliminary investigation in January at a time when the US-based social media company was under global regulatory scrutiny over antitrust concerns.
It found that Giphy, which was once a competitor to Facebook in digital advertising through paid sponsorship outside the UK, has plans to expand sponsorship deals to other countries, including the UK.
The regulator said: “If Giphy and Facebook continue to be merged, Giphy may have less incentive to expand its digital ads … This is particularly worrying given Facebook’s current market strength in serving ads.”
The world’s largest social media company bought Giphy, a website to create and share gifs, or GIFs, in May last year to combine it with the fast-growing photo-sharing app, Instagram.
However, a source told Reuters in June that Facebook had temporarily halted the merger.
The company said Giphy’s integration with other social platforms like Twitter Snapchat and ByteDance’s TikTok will not change.
“This merger is beneficial for competition and for everyone in the UK who uses Giphy and our services – from developers to service providers to content creators,” a Facebook spokesperson said, adding that it would cooperate with the investigation.
Giphy declined to comment.