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FACEBOOK INC

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Facebook : may have to sell GIF-maker Giphy on UK competition concerns

08/12/2021 | 05:26am EDT
FILE PHOTO: A Facebook logo is displayed on a smartphone in this illustration

* CMA says deal will harm competition for display ads

* Says Facebook could withdraw Giphy GIFs from competing platforms

* Facebook says it disagrees with findings, will work with CMA

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 spokesperson said.

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 provisional findings.

(Reporting by Pushkala Aripaka in Bengaluru; editing by Shounak Dasgupta, Jason Neely and Steve Orlofsky)


© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
ALPHABET INC. 1.00% 2855.56 Delayed Quote.62.93%
FACEBOOK INC 3.26% 335.34 Delayed Quote.22.76%
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Financials (USD)
Sales 2021 120 B - -
Net income 2021 40 439 M - -
Net cash 2021 79 410 M - -
P/E ratio 2021 23,8x
Yield 2021 -
Capitalization 945 B 945 B -
EV / Sales 2021 7,25x
EV / Sales 2022 5,86x
Nbr of Employees 63 404
Free-Float 84,0%
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Number of Analysts 52
Last Close Price 335,34 $
Average target price 417,26 $
Spread / Average Target 24,4%
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Managers and Directors
Mark Elliot Zuckerberg Chairman & Chief Executive Officer
David M. Wehner Chief Financial Officer
Michael Todd Schroepfer Chief Technology Officer
Atish Banerjea Chief Information Officer
Sheryl Kara Sandberg Chief Operating Officer & Director
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