The social network bought a platform for creating GIF animations in 2020 to join Instagram.
The deal between Facebook and Giphy has damaged the display advertising market, writes Reuters, citing the results of an audit by the UK Competition and Markets Authority (CMA).
Instagram Facebook bought the Giphy platform for $400 million in May 2020 to join Instagram.
The department began investigating the transaction in January. According to the agency, the merger with Giphy may lead to Facebook removing GIF files from competing platforms or requiring more user data to access them.
Facebook, when buying Giphy, eliminated the company as a competitor, the regulator believes. Prior to the deal, Giphy planned to sell advertising not only in the US, but also in the UK. As the investigation showed, Facebook terminated the Giphy advertising partnership after the merger.
“We do not agree with the preliminary conclusions of the CMA, which, in our opinion, are not confirmed,” a Facebook representative said. Giphy declined to comment.