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UK Regulator Suggested To Block Facebook’s Purchase of Giphy

There have been increasing concerns about Facebook turning into a monopoly and engaging in anti competitive practices by acquiring smaller companies rather aggressively rather than giving them room to grow and turn into full fledged competitors. This is something that many regulators have been trying to block because of the fact that this is the sort of deal that could potentially end up making it impossible for smaller companies to remain viable in the market, and Facebook’s attempts at acquiring Giphy for $400 million are the latest examples of this type of behavior.

With all of that having been said and now out of the way, it is important to note that Facebook might not be able to make this acquisition due to the reason that a UK based regulator has suggested to block it on the grounds that it might result in the creation of a monopoly. The regulator in question is the UK’s Competition and Markets Authority, and they have claimed that GIFs are a key aspect of how people communicate online and Facebook owning one of the most popular sources of GIFs would allow it to exert inordinate influence on the rest of social media.

Giphy was also starting up an ads business that Facebook would have had to compete against, and it is this pattern of Facebook buying up the competition that the regulatory authority is mainly taking issue with. Facebook is attempting to fight against this, but antitrust scrutiny from various corners is mounting. Just recently Facebook was unable to complete a $1 billion acquisition of the customer service platform Kustomer, so it might just be that the social media platform would keep getting blocked time and time again. This might hinder Facebook’s plans to grow, something that Facebook has been facing trouble with increasingly in the past. Whether or not this move will benefit the market remains to be seen.



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