Action Against the Tech Giants
Facebook, now Meta, were in the news again last month, which isn’t too much of a surprise, however this time it’s not for an ‘interesting’ name change or tax avoidance.
The UK’s competition watchdog has ordered Facebook to “reverse its acquisition” of its animated GIF platform, Giphy, which it initially bought in May 2020 for $315 million.
As quoted by Stuart McIntosh, the chair of independent inquiry group heading The Competition and Markets Authority (CMA), said: “The tie-up between Facebook and Giphy has already removed a potential challenger in the display advertising market. Without action, it will also allow Facebook to increase its significant market power in social media even further, through controlling competitors’ access to Giphy GIFs.”
Further adding: “By requiring Facebook to sell Giphy, we are protecting millions of social media users and promoting competition and innovation in digital advertising,” he added.
This isn’t the first time Facebook has had run-ins with the CMA; only last month the regulator fined Facebook almost $70 million for deliberately withholding information related to ongoing oversight of the acquisition, classifying the infringement as a “major” breach.
It’s important these tech giants are held accountable for their actions and are not seen as untouchable. They hold immensely valuable data on most of the planet and have been caught several times selling this off to an array of other companies.
Allowing competition in the market is a must. If the CMA didn’t enforce this, there are additional concerns such as Facebook closing rivals access to the Giphy platform or requiring rivals to provide it with more user data to access the Giphy GIFs, additionally increasing their hold on this digital space.
Allowing just one of these vast companies to get a hold on the market is a dangerous avenue to go down, it’s important these regulatory bodies enforce fair competition rules to ensure we aren’t monopolised by one platform that holds all our private data.
Whilst as advertisers, these platforms have provided us with vast opportunities to reach people in profound new ways with creative and intelligent targeting, it’s imperative we always keep a foot in the door, to we steer the competitive and fair use direction.
It appears Meta didn’t escape this investigation however, as The CMA concluded in a press release.:
“After consulting with interested businesses and organizations — and assessing alternative solutions (known as ‘remedies’) put forward by Facebook — the CMA has concluded that its competition concerns can only be addressed by Facebook selling Giphy in its entirety to an approved buyer,”
I’m sure this won’t be the last time Meta push the boundaries of fair use and fair competition, but for now this is a win for the consumer and advertiser, providing a reminder to the other tech giants they can’t get away with abusing their power.
A view from Joe Harper, and are not necessarily those of Media Performance