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
Facebook has acquired GIPHY to be part of the Instagram team. GIPHY was created in 2013 with the goal of making communication more fun. GIPHY announced that it will be joining the team at Instagram. This makes sense, considering that GIPHY’s stickers had already been added to Instagram stories, and their GIF search is accessible in Instagram direct messages.
Facebook announced that GIPHY is joining the Facebook company today. Facebook plans to further integrate GIPHY’s GIF library into Instagram and other apps. Facebook has used GIPHY’s API for years in Instagram, the Facebook app, Messenger and WhatsApp.
A lot of people in our community already know and love GIPHY. In fact, 50% of GIPHY’s traffic comes from the Facebook family of apps, half of that from Instagram alone. By bringing Instagram and GIPHY together, we can make it easier for people to find the perfect GIFs and stickers in Stories and Direct. Both our services are big supporters of the creator and artist community, and that will continue. Together, we can make it easier for anyone to create and share their work with the world.
Facebook says GIPHY will continue to operate its library, including global content collection. Facebook will invest further in GIPHY’s technology and relationships with content and API partners. People will still be able to upload GIFs. Developers and API partners will continue to have access to GIPHY’s APIs, and GIPHY’s creative community will still be able to create great content.
Those who already use Facebook or Instagram may have made use of some of GIPHY’s stickers or GIFs. It seems likely that some of GIPHY’s users went to the GIPHY website to search for GIFs to put on other social media sites.
I’m not sure how users who aren’t fans of Facebook or Instagram will take the news that Facebook acquired GIPHY. The website doesn’t make it clear that it has been acquired by Facebook, and GIPHY’s announcement was posted on Medium. It’s hard to say how much data Facebook and Instagram were gleaning from GIPHY previous to this acquisition, and that thought could make some people stop using GIPHY.