Britain’s competition regulator said Thursday that it was referring to Facebook’s acquisition of GIF database Giphy for an in-depth investigation.
The Competition and Markets Authority (CMA) recently completed its initial probe into the Facebook-Giphy merger — which has already closed — and concluded that the deal raises competition concerns.
The watchdog says it found evidence that Giphy had plans to expand its digital advertising partnerships to the U.K. 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.
The CMA gave the companies five working days to address their concerns about the deal but Facebook refused to do so, the watchdog said.
“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.
Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.