Facebook may be forced to unwind Giphy acquisition

Facebook’s acquisition of the animated image search engine Giphy may harm competition and potentially should be unwound, regulators in the United Kingdom said Thursday.

The Competition and Markets Authority (CMA) provisionally found that the takeover would negatively impact competitiveness in the social media market.

“Millions of posts every day on social media sites now include a GIF,” the agency wrote in a blog post. “Any reduction in the choice or quality of these GIFs could significantly affect how people use these sites and whether or not they switch to a different platform, such as Facebook. As most major social media sites that compete with Facebook use Giphy GIFs, and there is only one other large provider of GIFs – Google’s Tenor – these platforms have very little choice.”

The CMA also determined that Facebook and its assets Instagram and WhatsApp may account for over 70 percent of time people spend on social media.

The regulatory body will now accept responses from relevant parties to its early findings before issuing its final report and recommendations by Oct. 6.