U.K. Presses Facebook To Ensure Giphy Independence

Facebook CEO Mark Zuckerberg.

Photo credit: Anthony Quintano on Flickr, under Creative Commons license

The UK's Competition and Markets Authority (CMA) has implored Facebook to take action to ensure that Giphy, the popular GIF sharing service that it reached a deal to acquire in May, can be run independently, after previously launching a probe into the acquisition over competition concerns. After acquiring Giphy, Facebook had to pause its planned integration with the company's GIF service to allow for a probe from the UK's competition watchdog, which is now pressing both companies to appoint a “formal hold separate manager” to ensure that Giphy can operate as a standalone entity. The CMA's probe into the acquisition centers on whether Giphy will give Facebook access to much information on its rivals operations, according to a formal filing.

According to the CMA, there's “a general lack of independence of the Giphy business from Facebook” due to stipulated clauses in Facebook employment contracts that were handed to Giphy's employees on the completion of the acquisition. The regulatory watchdog also asserts that members of Giphy's senior management team have left the business and, in turn, given space for Facebook's full control of the business, which it's now trying to prevent.

Although half of Giphy's business came from Facebook's suite of apps before the acquisition, the GIF service is also widely used on competing apps such as Twitter, TikTok, Signal, and Apple's iMessage.