Facebook recently acquired Giphy, the GIF provider of apps like Instagram, Snapchat, and TikTok. Citing usage data of Giphy to justify the acquisition.
Facebook said that almost 50% of Giphy’s revenue comes from Facebook and its related apps such as Instagram and Whatsapp but this acquisition is being scrutinized by the United kingdom’s competition watchdog (Competition and Markets Authority) saying that it was investigating whether or not the acquisition “may be expected to result in a substantial lessening of competition”.
The deal, which was at around $400 million (roughly Rs. 3,038 crores) can purportedly give facebook access to data of users of Snapchat and TikTok also thereby increasing the intrusion of Facebook in our daily lives. While a proper investigation is yet to be started, the Competition and Markets Authority (CMA) earlier in the week served Facebook with an initial enforcement order and on Friday began the primary stage of an investigation, inviting comments until 3 July, with no date set for its decision. This means that the integration of Instagram with Giphy is on hold, at least for now.
Facebook issued a statement on Friday which said,
“We are prepared to show regulators that this acquisition is positive for consumers, developers, and content creators alike,”
It also said that Giphy’s integrations with other social platforms like Twitter, Snapchat, and ByteDance’s TikTok would not change. Giphy also sought to reassure its users. “Everyone will still have equivalent access to Giphy. we glance forward to demonstrating how this partnership may be a win for our users, partners, and content creators,”
After scandals such Cambridge Analytica data scandal and many other data breaches, Facebook is constantly under pressure to be more transparent with how it collects and uses data of its users and is regularly under scrutiny.