* CMA says deal will harm competition for display ads
* Says Facebook could withdraw Giphy GIFs from competing
* Facebook says it disagrees with findings, will work with
Aug 12 (Reuters) - Britain might require Facebook to
sell GIF website Giphy after the country's competition regulator
said on Thursday its investigation found the deal between the
two companies would hurt the display advertising market.
Facebook, the world's largest social media company, bought
Giphy, a website for making and sharing animated images, or
GIFs, in May last year to integrate it with its photo-sharing
app, Instagram. The deal was pegged at $400 million by Axios.
The UK's Competition and Markets Authority (CMA) began a
probe into the deal in January, and in April referred the deal
to an in-depth investigation.
"Giphy's takeover could see Facebook withdrawing GIFs from
competing platforms or requiring more user data in order to
access them. It also removes a potential challenger to
Facebook," said Stuart McIntosh, chair of the independent
investigation for the CMA.
Another major provider of GIFs is Google's Tenor.
The CMA found that, before the Facebook deal, Giphy was
considering expanding its paid advertising services offered in
the United States to other countries, including the UK. However,
Facebook terminated Giphy's ad partnerships following the deal,
according to the regulator.
"We disagree with the CMA's preliminary findings, which we
do not believe to be supported by the evidence. As we have
demonstrated, this merger is in the best interest of people and
businesses in the UK - and around the world," a Facebook
The representative added that the California-based company
would continue to work with the CMA. Giphy declined to comment.
This is not the first time the CMA has raised concerns about
major deals. The $9.2 billion eBay-Adevinta deal has caught its
attention, and the CMA has asked the new owners of supermarket
chain Asda to fix fuel competition concerns.
The watchdog said that it has engaged with other agencies
reviewing the deal to help the CMA's investigation, and is now
inviting comments from interested parties by Sept. 2 for its
(Reporting by Pushkala Aripaka in Bengaluru; editing by Shounak
Dasgupta, Jason Neely and Steve Orlofsky)