Britain’s competition regulator wants to probe Facebook, Inc (NASDAQ:FB) acquisition of GIF site Giphy. The antitrust regulators undertook an in-depth investigation to conclude that the deal posed competition concerns.
The watchdog to become more vigilant
After coming across evidence, the watchdog has become more vigilant, showing that Giphy intends to make further expansions in the U.K and other markets. The business channels its efforts and resources into the digital advertising partnerships, and the plans underway have been in place before the close of the deal.
Giphy stands out as one of the top libraries for GIFs worldwide. It also deals with the animated images of pop culture references and memes that continue to be shared on the internet. Giphy has, over the years, posed intense competition to the start-up Gfycat and the GIF platform Tenor owned by Google.
The watchdog has a reasonable basis for conducting investigations
The headquarters of both Facebook and Giphy are in the United States, but that won’t stop CMA from investigating the merger. The body has all rights to undertake investigations in all acquisitions valued at about £70 million ($96.5 million) and above. The watchdog also has the right to carry out investigations in those instances where the combined businesses that bear about 5% of a reasonable market share.
The CMA has spoken to the companies, giving them about five days to settle their concerns regarding the deal. Reports indicate that Facebook has remained adamant, and thus the watchdog is thinking about exerting more pressure.
Facebook’s spokesperson in a recent interview disclosed that they remained open to CMA’s investigations at any time. The spokesperson termed the merger a good thing that wouldn’t have any negative impact on business. The official calls upon the watchdog to recognize that the merger is a good thing considering that it represents the interest of persons who use Giphy and their businesses across the UK.
The initial probe has come to an end, and Britain’s competition regulator says that any company must conform to the law. It vows to continue channeling its efforts and resources into activities that ensure compliance with good market practices. It pushes for fair competition, though Facebook seems unmoved.