The UK’s competition authority has said it would deepen its investigation of Facebook’s takeover of Giphy, the provider of humorous short looping videos.

Facebook’s acquisition of Giphy was announced last May, and in June the Competition and Markets Authority (CMA) said it would look into whether the $400 million (£317m) deal “has resulted or may be expected to result in a substantial lessening of competition in any market or markets in the United Kingdom”.

The deal had raised competition concerns as Giphy is widely used on social media, and while Facebook said half of Giphy’s traffic originates from Facebook apps, such as Instagram and WhatsApp, Giphy also provides images to others including Snapchat, TikTok and Twitter.

Image credit: Facebook

Competition concerns

Facebook had also previously said it plans to integrate Giphy into its Instagram photo app, potentially giving it access to large amounts of data.

The CMA began an initial investigation in January, and after the initial investigation, the CMA said that if the two companies remain merged, Giphy could have less incentive to expand its digital advertising.

This raised its concerns about Facebook’s existing market power in display advertising.

Facebook for its part had reportedly said that Giphy’s integrations with other social platforms like Twitter Snapchat and ByteDance’s TikTok would not change.

Last week the CMA gave Facebook and Giphy five working days to offer proposals to address its concerns over their merger deal.

No concessions

But now according to Reuters, the CMA said on Thursday that Facebook had informed it that it would not be offering any remedies to address its competition concerns.

As a result of offering no concessions, the CMA said it had referred Facebook’s acquisition of Giphy for an in-depth probe.

“We will continue to fully cooperate with the CMA’s investigation,” a Facebook spokesman told Reuters in an emailed statement.

“This merger is good for competition and in the interests of everyone in the UK who uses GIPHY and our services – from developers to service providers to content creators,” he added.

New York-based Giphy did not immediately respond to a request for comment.

Tom Jowitt

Tom Jowitt is a leading British tech freelancer and long standing contributor to Silicon UK. He is also a bit of a Lord of the Rings nut...

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