UK Warns Facebook Over Giphy Deal

The UK’s merger watchdog has warned Facebook that it could go beyond forcing the tech giant to unwind its purchase of image-hosting platform Giphy if the deal is deemed to be anti-competitive, reported Bloomberg.

As the two clashed in court over the review of the US$400 million deal, the Competition and Markets Authority (CMA) stated that some of Facebook’s assets or services might need to be divested “given that Giphy is no longer fully self-standing.” The regulator issued the warning at a London tribunal hearing where Facebook is arguing that the CMA’s restrictions on the tie-up were unreasonable and disproportion.

Facebook had to pause its integration with Giphy in June after the CMA announced that it wanted to investigate whether the deal would give the social network too much information on its rivals’ operations. The CMA is yet to decide whether to open a formal merger investigation. 

The regulator is increasingly voicing concerns about internet giants swallowing up smaller firms. Its Chief Executive Officer Andrea Coscelli said last week that the largest tech companies should face scrutiny for any transaction, no matter how tiny.

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