Britain’s competition regulator has said it may force Facebook to sell off Giphy, a provider of Gifs (Graphics Interchange Formats) that it agreed to buy last year.

The Competition and Markets Authority (CMA) said that it had provisionally found that Facebook’s merger with Giphy would harm competition between social media platforms, and remove a potential challenger in the display advertising market.

“Millions of posts every day on social media sites now include a Gif,” a CMA statement said.

Many platforms use Giphy

"Any reduction in the choice or quality of these Gifs could significantly affect how people use these sites, and whether or not they switch to a different platform, such as Facebook,” it added.

The authority pointed out that most major social media sites – such as TikTok, Twitter and Snapchat – that compete with Facebook use Giphy Gifs.

Google’s Tenor is the only other large provider of Gifs in the market.

The CMA provisionally found that Facebook’s ownership of Giphy could lead it to deny other platforms access to its Gif, or change the terms of access.

UK expansion

The regulator also expressed concern about the loss of a potential competitor to Facebook in the digital advertising market. Giphy had been offering paid advertising in the US, and had been considering expanding these operations into the UK.

“Facebook terminated Giphy’s paid advertising partnerships following the deal, meaning an important source of potential competition has been lost,” the CMA said.

The CMA will now look at responses from interested parties, before issuing a final report in early October.