Benzinga | Aug 12, 2021 04:16PM EDT

UK Antitrust Law Could Jeopardize Facebook's Giphy Acquisition: Report

* The Wall Street Journal reports that Facebook Inc (NASDAQ:FB) might have to sell Giphy under U.K.'s pending competition concerns. Giphy allows users to search for, create and share animated images known as GIFs.

* The U.K.'s Competition and Markets Authority began probing the deal in Jun. 2020 and launched an initial investigation in Jan.

* CNBC reports that the CMA has provisionally found Facebook's purchase of Giphy harmful for competition between social media platforms and remove a potential challenger in the display advertising market.

* Facebook's peers, including Twitter Inc (NYSE:TWTR), TikTok, and Snap Inc's (NYSE:SNAP) Snapchat, use Giphy GIFs and could be hurt if Facebook denied them access to the images or change usage terms.

* The CMA found that Giphy was planning to expand its paid advertising services offered in the U.S. to other countries, including the U.K., before the Facebook deal, Reuters reported. However, Facebook terminated Giphy's ad partnerships following the agreement, according to the regulator. Facebook has refuted the allegations.

* Facebook acquired Giphy in 2020 for $400 million to integrate its offering into Instagram and other apps.

* Price Action: FB shares closed higher by 0.75% at $362.65 on Thursday.

* Photo by Anthony Quintano via Wikimedia