UK antitrust watchdog launches investigation into Facebook's acquisition of Giphy
Facebook announced last month that it had bought animated picture platform Giphy with the intention of integrating it with its Instagram team. According to unnamed sources cited by Axios, the deal is worth around $400 million, making it smaller but not insignificant in comparison with Instagram, which was snapped for $1 billion in 2012.
Instagram went on to grow beyond a $100 billion valuation, and you’d have to imagine that Giphy will grow further now that it’s operating under the Instagram umbrella. However, there’s now a bump on that road as the acquisition is being investigated by the UK Competition and Markets Authority (CMA).
The antitrust watchdog said it has opened the investigation in response to concerns that Facebook’s acquisition of Giphy could reduce the competition in one or more markets. The CMA also issued an “initial enforcement order” that prevents the transfer of assets and staff between the two companies, as well as the integration of Giphy’s tech inside any of Facebook’s products.
In the US, the FTC has also taken a keen interest into Facebook’s many acquisitions, both big and small. Lawmakers believe the social giant has shown a pattern of purchasing companies with the purpose of killing them silently or absorbing them into its organization before they pose a threat to Facebook’s business.
In this case, the social giant has responded in a statement that “developers and API partners will continue to have the same access to Giphy, and Giphy’s creative community will still be able to create great content. We are prepared to show regulators that this acquisition is positive for consumers, developers, and content creators alike.”