Facebook's Giphy purchase hurts competition: UK watchdog

Facebook's Giphy purchase hurts competition: UK watchdog

LONDON (AP) - Facebook’s purchase of Giphy will hurt competition for animated images, U.K. regulators said Thursday, meaning the social network could ultimately be forced to unwind the deal if the provisional findings are confirmed.

The Competition and Markets Authority said the acquisition would hurt competition among social media platforms because there’s only one other big provider of GIFs, Google’s Tenor.

Giphy’s library of short looping videos, or GIFs, are a popular tool for internet users sending messages or posting on social media.

The deal will also reduce digital advertising competition by removing a potential challenger from the market, the watchdog said. It started looking into the acquisition last year, shortly after Facebook announced its plan to acquire Giphy in a deal reportedly worth $400 million.

Facebook said it disagreed with the preliminary findings, which it didn’t we believe to be supported by the evidence.

“As we have demonstrated, this merger is in the best interest of people and businesses in the U.K. - and around the world - who use GIPHY and our services,” Facebook said. “We will continue to work with the CMA to address the misconception that the deal harms competition.”