What you need to know
- Facebook has fallen under scrutiny in the UK over its merger with Giphy.
- The merger has been halted while the probe is underway.
- The company also faces scrutiny from Australian competition officials.
Facebook's $400 million purchase of Giphy is being scrutinized by the UK's Competition and Markets Authority. The body announced the probe today, just under a month since Facebook announced its merger:
A Facebook spokesperson told Reuters that it was "prepared to show regulators that this acquisition is positive for consumers, developers, and content creators alike." Facebook has also fallen under scrutiny in Australia as the country prepares its own probe (via the Syndey Morning Herald).
"This is not just any old GIF supplier, it's the biggest, most important one and given that, we were surprised that we weren't notified by Facebook of this acquisition," Australian Competition and Consumer Commission (ACCC) chairman Rod Sims said on Monday, "If, when we look at it, we do have concerns, then we obviously need to take court action."
Wired Magazine argued last month that Facebook's Giphy purchase gave it a somewhat anti-competitive edge over its competitors that it would be likely to abuse based on its history.
Facebook says it will not collect information specific to individual people using Giphy's API, but it will get valuable data about usage patterns across the web. Facebook's suite of apps already made up a huge chunk of Giphy's traffic—50 percent, according to the company—but now it can collect data from other platforms, many of them competitors, and possibly spot emerging trends. If Facebook realized a certain type of GIF was trending on Twitter, for example, it could commission an artist to make a corresponding collection exclusively for Instagram, luring more users there. Facebook has also been accused of copying features from rivals like Snapchat for years, and will now have insight into how their users interact with GIFs.
As a result of these probes and concerns, CNN reports that Facebook has halted the merger pending the outcome.