Search 'middle finger' on Giphy: Basically Facebook's response to UK competition concerns over merger
(2021/09/09)
- Reference: 1631194994
- News link: https://www.theregister.co.uk/2021/09/09/facebook_cma_giphy/
- Source link:
Facebook has hit back at the UK's regulatory challenge to its decision to buy gif slinger Giphy, claiming the provisional findings by the competition watchdog are based on "fundamental errors."
The tech giant's no-nonsense response was sent to the Competition and Market's Authority (CMA) last month but has only just been made public
It follows [2]publication of the CMA's findings in August which claimed Facebook's merger with Giphy would "harm competition between social media platforms and remove a potential challenger in the display advertising market."
[3]
If the CMA gets its way, it could force Facebook to unwind the deal and sell Giphy.
[4]
[5]
Last month, we reported how Facebook had already finished absorbing Giphy in May 2020 for about half a billion dollars, though it hasn't been allowed to integrate the startup's GIF-making tools into its own platform because of the ongoing investigation by the CMA.
Now, as the deadline for the CMA's final ruling nears, Facebook has hit back saying that the watchdog has applied the "wrong legal test" and that the CMA's provisional decision contained "fundamental errors."
[6]WhatsApp pulls plug on Taliban helpline, shuts down official-looking accounts
[7]Once again, Facebook champions privacy ... of its algorithms: Independent probe into Instagram shut down
[8]Perhaps regretting those Instagram, WhatsApp acquisitions, UK watchdog suggests Facebook offloads GIF haven Giphy
[9]Facebook Giphy merger stays on ice after failed challenge to UK competition regulator
Throughout the 14-page document, Facebook questions the assumption made by the UK watchdog before laying out its reasons for unpicking its legal arguments, including describing concerns that the merger would damage competition in display advertising as "erroneous."
It also reveals that in March, Facebook "informally offered… commitments to the CMA, which the CMA rejected," including the promise to "maintain existing and new API Users' access to GIPHY's library for five years."
[10]
Wrapping up, it went on to say that the deal has "no material nexus to the UK" and that Giphy is a "US-based business with no UK assets, employees, revenues, or customers."
"The transaction is therefore based on nothing more than the unremarkable fact that people in the UK can access the internet," it said.
In a statement, a CMA spokesperson told us: "The CMA provisionally found that Facebook's merger with Giphy will harm competition between social media platforms and remove a potential challenger in the display advertising market.
[11]
"Our preliminary view was that full divestiture of GIPHY would represent a comprehensive and effective remedy. However, we will consider any behavioural remedies put forward as part of our consultation."
The CMA's final ruling is expected early in October. ®
Get our [12]Tech Resources
[1] https://assets.publishing.service.gov.uk/media/613721658fa8f503ba3dc81d/Facebook_Giphy_-_Response_to_Remedies_Notice.pdf
[2] https://www.theregister.com/2021/08/13/facebook_giphy_block/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YTovvdaWjC2TH3joErcxwwAAAQA&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YTovvdaWjC2TH3joErcxwwAAAQA&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YTovvdaWjC2TH3joErcxwwAAAQA&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2021/08/18/whatsapp_shuts_down_taliban_helpline/
[7] https://www.theregister.com/2021/08/13/algorithmwatch_shut_down/
[8] https://www.theregister.com/2021/08/13/facebook_giphy_block/
[9] https://www.theregister.com/2021/05/14/facebook_giphy_court_appeal/
[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YTovvdaWjC2TH3joErcxwwAAAQA&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YTovvdaWjC2TH3joErcxwwAAAQA&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[12] https://whitepapers.theregister.com/
The tech giant's no-nonsense response was sent to the Competition and Market's Authority (CMA) last month but has only just been made public
[1]PDF
.It follows [2]publication of the CMA's findings in August which claimed Facebook's merger with Giphy would "harm competition between social media platforms and remove a potential challenger in the display advertising market."
[3]
If the CMA gets its way, it could force Facebook to unwind the deal and sell Giphy.
[4]
[5]
Last month, we reported how Facebook had already finished absorbing Giphy in May 2020 for about half a billion dollars, though it hasn't been allowed to integrate the startup's GIF-making tools into its own platform because of the ongoing investigation by the CMA.
Now, as the deadline for the CMA's final ruling nears, Facebook has hit back saying that the watchdog has applied the "wrong legal test" and that the CMA's provisional decision contained "fundamental errors."
[6]WhatsApp pulls plug on Taliban helpline, shuts down official-looking accounts
[7]Once again, Facebook champions privacy ... of its algorithms: Independent probe into Instagram shut down
[8]Perhaps regretting those Instagram, WhatsApp acquisitions, UK watchdog suggests Facebook offloads GIF haven Giphy
[9]Facebook Giphy merger stays on ice after failed challenge to UK competition regulator
Throughout the 14-page document, Facebook questions the assumption made by the UK watchdog before laying out its reasons for unpicking its legal arguments, including describing concerns that the merger would damage competition in display advertising as "erroneous."
It also reveals that in March, Facebook "informally offered… commitments to the CMA, which the CMA rejected," including the promise to "maintain existing and new API Users' access to GIPHY's library for five years."
[10]
Wrapping up, it went on to say that the deal has "no material nexus to the UK" and that Giphy is a "US-based business with no UK assets, employees, revenues, or customers."
"The transaction is therefore based on nothing more than the unremarkable fact that people in the UK can access the internet," it said.
In a statement, a CMA spokesperson told us: "The CMA provisionally found that Facebook's merger with Giphy will harm competition between social media platforms and remove a potential challenger in the display advertising market.
[11]
"Our preliminary view was that full divestiture of GIPHY would represent a comprehensive and effective remedy. However, we will consider any behavioural remedies put forward as part of our consultation."
The CMA's final ruling is expected early in October. ®
Get our [12]Tech Resources
[1] https://assets.publishing.service.gov.uk/media/613721658fa8f503ba3dc81d/Facebook_Giphy_-_Response_to_Remedies_Notice.pdf
[2] https://www.theregister.com/2021/08/13/facebook_giphy_block/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YTovvdaWjC2TH3joErcxwwAAAQA&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YTovvdaWjC2TH3joErcxwwAAAQA&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YTovvdaWjC2TH3joErcxwwAAAQA&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2021/08/18/whatsapp_shuts_down_taliban_helpline/
[7] https://www.theregister.com/2021/08/13/algorithmwatch_shut_down/
[8] https://www.theregister.com/2021/08/13/facebook_giphy_block/
[9] https://www.theregister.com/2021/05/14/facebook_giphy_court_appeal/
[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YTovvdaWjC2TH3joErcxwwAAAQA&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YTovvdaWjC2TH3joErcxwwAAAQA&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[12] https://whitepapers.theregister.com/
Re: Half a billion?
fidodogbreath
Presumably they think your GIF search strings will give them $500M worth of additional data on how to manipulate you into buying shit you don't need, and/or which echo chamber to place you in.
Re: Half a billion?
Mike 137
" your GIF search strings will give them $500M worth of additional data "
Indeed so, but why would anyone sign up to such a narrowly defined service in the face of the proliferation of social media platforms where you can share almost anything digital?
the wrong legal test
Pascal Monett
I acknowledge that Facebook's regular skirting at the edge of the law puts it in fine position to know how the law works, but it is still ferociously ironic for Facebook to educate a government institution focusing on competition how it should interpret the law.
I expect Facebook to be brutally slapped down on this one.
Half a billion?
" Giphy, styled as GIPHY, is an American online database and search engine that allows users to search for and share short looping videos with no sound, that resemble animated GIF files " [Wikipedia]
Why could this be worth half a billion (some say $400k)? Obviously it has a data slurping angle like all these online "services". but what I can't get my head round is its assumed popularity. They'll need the head count to make the money, but why would anyone sign up to this specifically, seeing there are so many other ways to share all sorts of images and data. This isn't just a rhetorical rant - I'd really like to know what makes this remotely interesting.