Facebook, the final resting place for all the information on the planet (if Mark Zuckerberg gets his way), might be forced to get rid of one of its more recent acquisitions. Last year, the company bought Giphy — and if you don’t know what they do, we hope you’re enjoying your first day on the internet — for $400 million. Now, a major source of user information might disappear into the arms of another. Tech company, that is.
Facebook wants the CMA to Giphy them a break
The Competition and Markets Authority (CMA), the UK’s competition regulator, says that it has identified potential competition issues with Facebook’s purchase of the GIF-sharing website and that “…the only effective way to address the competition issues that we have identified is for Facebook to sell Giphy, in its entirety, to a suitable buyer.”
Specifically, the watchdog said that the social network could use its ownership to either deny access to Giphy to other platforms, or that it could demand increased access to user data that platforms like TikTok, Twitter and Snapchat hold in exchange for access to the service. Ownership of Giphy could also possibly give Facebook an unfair advantage in the UK-based display advertising market, according to the CMA.
The social media giant, of course, disagrees. The company said “We disagree with the CMA’s preliminary findings [Told you – Ed], which we do not believe to be supported by the evidence.”
“As we have demonstrated, this merger is in the best interest of people and businesses in the UK—and around the world—who use Giphy and our services. We will continue to work with the CMA to address the misconception that the deal harms competition.”
But then, Facebook has a long history of promising to use its acquisitions in one way only to change its mind further down the line. WhatsApp’s founders left the company after its about-face on how user data was to be utilised and when Oculus was acquired by the company, it was promised that a Facebook account would never be needed and that users would not be tracked or used for ads — among other promises. You could argue that that was just Oculus founder Palmer Luckey calming the user base so that he could have all that sweet, sweet acquisition money but the eventual outcome is the same.
Source: via Ars Technica