Facebook wants to be a platform for all your social needs, but it’s a big step last month to take ownership in the GIF world – short, looping videos that people use to express emotions in online conversations – maybe Is not it to go as expected. The UK Competition and Markets Authority – the country’s antitrust watchdog – announced today that it has launched an investigation into Facebook’s acquisition of the popular GIF repository and search engine Giphy, which announced last month that, to integrate it, $ 400 million will reportedly be acquired. In his Instagram team. In particular, it remains to be seen how this deal will further reduce competition in the respective markets of the two companies.
“The Competition and Markets Authority (CMA) is considering whether this is the case or whether this transaction has resulted in the creation of a relevant merger position under the merger provisions of the Enterprise Act 2002 and if so , Then this situation can be expected to significantly reduce competition within any United Kingdom market or markets for goods or services, ”it notes in the announcement.
The CMA is now opening the case for third party comments, to be submitted by July 3, 2020.
CMA further noted that Facebook cannot continue with acquisition-related activities until its investigation is underway, unless it has prior written approval from CMA. This includes integrating products, integrating teams, working together on business deals or contracts. Both Facebook and Giphy have confirmed to the CMA that they are complying with the order.
GIFs are so ubiquitous on the web, and so easy (and free) to import and use, that the business model behind them is not immediately clear, and therefore it may seem strange to hear about a conflicting complaint related to an acquisition . GIF platform. However, it is Facebook – a company that has long been in the crosshairs of competition regulators in the US and Europe – and what it is for, even without big money (not yet) involved, when searching When it comes, Giphy is very large. Using GIF
And GIFs stand to occupy a larger role in the Internet business, both in a more general and more direct way.
On the direct side, while Giphy has not made any money so far, there is a clear opportunity to move into the area of sponsored GIFs to create and broadcast GIF-based content, and more services. For a company like Facebook looking for ever more innovative and diverse ad formats that work in the context of social media, the attraction of a popular platform is to fill that business vision.
On the more general side, they are an important way of generating greater engagement in social media, another major goal of Facebook – again, as a way to fuel more audiences and eyeballs to drive more advertising businesses. Prior to purchasing Facebook, the two had already done an integration: a full 50% of Giphy’s traffic came from Facebook’s assets, Instagram, Messenger and WhatsApp, as well as integration with Facebook, speaking only of usage How the cases were added are already for two.
Facebook has previously investigated the merger by CMA, although it hasn’t really given a tough ride through either of them. Perhaps the most important thing was that the company’s $ 19 billion acquisition of WhatsApp, given to both the highly popular messaging platform: and how other platforms continue to develop on Facebook, can be argued about the no-strings-attached node There was some contradictory regret that the deal was found to be closed – leading to a fine after the fact. It will therefore be interesting to see if the CMA only practices more foresight with foresight, or at least better deals with the deal.