Facebook’s Acquisition of GIPHY Questioned by Several Authorities

The UK’s Competition and Markets Authority (CMA) is investigating Facebook’s acquisition of GIPHY. The CMA is considering whether that transaction has resulted in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002. If so, then the merger may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods and services.

As you may recall, GIPHY was acquired by Facebook in May of 2020. At the time, Facebook stated that 50% of GIPHY’s traffic already came from Facebook’s family of apps, with half of that amount coming from Instagram alone.

Reuters reported that Facebook is now pausing the integration of GIPHY.

Reuters also reported that the CMA served Facebook with an initial enforcement order earlier this week and began the first stage of an investigation on Friday. That part of the investigation invites comments on the merger of Facebook and GIPHY from any interested party.

Politico reported that the U.S. Department of Justice and the U.S. Federal Trade Commission are also seeking to review the Facebook/GIPHY merger. It appears each wants to determine for themselves whether this merger should be allowed to go forward. The two agencies have not yet resolved a dispute over which of them should take on the task, according to Politico.

Earlier this month, the Australian Competition & Consumer Commission (ACCC) began an investigation of Facebook’s acquisition of GIPHY.

The ACCC is considering whether the acquisition:

  • provides Facebook with data that will strengthen its market power in any markets
  • provides Facebook with data about its social media and online private messaging rivals, that may lead to a substantial lessening of completion
  • could lead to the foreclosure of Facebook’s social media and online private messaging rivals