On Wednesday Facebook argued to an appellate court that the UK’s antitrust enforcer cannot use interim measures during merger reviews to “regulate the structure of competition” across markets. Facebook is looking to challenge the restrictions imposed by the CMA while investigating its purchase of Giphy, saying the restraints are too broad.
Earlier this month Britain’s competition regulator said that it was referring Facebook’s acquisition of GIF database Giphy for an in-depth investigation.
The watchdog says it found evidence that Giphy had plans to expand its digital advertising partnerships to the UK and other markets before the deal was reached. It believes Giphy’s combination with Facebook would mean the firm has less incentive to expand its digital ads business, leading to a potential loss of competition.
“We will continue to fully cooperate with the CMA’s investigation,” a Facebook spokesperson told CNBC.
“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,” the spokesperson added.
Giphy is one of the world’s top libraries for GIFs, animated images involving memes or pop culture references that are shared on the internet. It competes with the likes of Google-owned GIF platform Tenor and the start-up Gfycat.
Though both Giphy and Facebook are headquartered in the U.S., the CMA has the power to investigate mergers when the business being acquired has annual revenues of at least £70 million ($96.5 million) or when the combined businesses have at least a 25% share of any “reasonable” market.
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