UK competition authority demands that Facebook sells Giphy, citing risks over users' data
Today, following an in-depth investigation, the UK Competition and Market Authority (CMA) assessed that the competition concerns can only be addressed by Facebook selling Giphy in its entirety.
In our submission to the CMA we argued that the Facebook acquisition of Giphy was likely to significantly impede effective competition in several vitally important markets and result in the strengthening of Facebook’s dominant positions, with ramifications for competition and in turn upon consumers and wider society.
The CMA's independent panel reflected on some of PI's concerns. In particular it "concluded that Facebook would be able to increase its already significant market power in relation to other social media platforms by [...] changing the terms of access by, for example, requiring TikTok, Twitter and Snapchat to provide more user data in order to access Giphy GIFs."
"With this decision, the CMA confirms that data of individuals is a key factor for assessing big tech dominance. Facebook acquisition of Giphy reduced what little pressure there currently is to provide meaningful privacy options to consumers, leading to even less competition on privacy standards and thereby enabling the further degradation of consumers’ experience" said Tomaso Falchetta, Global Policy Lead at Privacy International.
Today, following an in-depth investigation, the UK Competition and Market Authority (CMA) assessed that the competition concerns can only be addressed by Facebook selling Giphy in its entirety. This is a very significant decision. Facebook, the largest provider of social media sites and display advertising in the UK, acquired Giphy, the largest provider of GIFs. The merger would further increase Facebook’s dominance and Facebook would have benefitted from Giphy’s data collection practices and integration with other services. With the aquisition of Giphy, Facebook could limit the ability of rival apps to compete with Facebook in social media and could demand individuals' data as a condition for rival companies to use Giphy.
In particular PI was concerned that, through the acquisition of Giphy, Facebook would potentially be able to:
- Obtain users’ personal data processed via Giphy and potentially combine it with the vast amount of data it already processes to further strengthen its capacity to profile users, predict and influence their behaviours;
- By modifying Giphy’s API, increase the categories of personal data collected from users;
- Impose to clients (including Facebook’s competitors in the social media and messaging market) conditions for the use of Giphy, potentially preventing clients from protecting their users’ personal data;
- Increase its capacity to deliver targeted ads both to Giphy’s users and internet users even outside Facebook’s platform and services (and including within the ecosystems of its competitors) through increased tracking capabilities.
The Australian Competition and Consumer Commission (ACCC) is also reviewing the Facebook/Giphy merger and PI has made a submission to their inquiry as well.