The logos of Facebook and Giphy.
Aytac Unal | Anadolu Agency via Getty Images
LONDON — The U.K.’s competition regulator announced Thursday that Facebook’s acquisition of popular GIF website Giphy presents competition concerns.
The Competition and Markets Authority said it has provisionally found Facebook’s purchase of Giphy will harm competition between social media platforms and remove a potential challenger in the display advertising market.
Stuart McIntosh, chair of the independent inquiry group carrying out the phase 2 investigation, said in a statement that Facebook could pull GIFs from competing platforms or ask users to hand over more data in order to access them.
McIntosh said the deal also removes a “potential challenger” to Facebook in the £5.5 billion display ad market.
“While our investigation has shown serious competition concerns, these are provisional,” McIntosh said.
“We will now consult on our findings before completing our review. Should we conclude that the merger is detrimental to the market and social media users, we will take the necessary actions to make sure people are protected.”
Facebook did not immediately respond to a CNBC request for comment.
At the time of the acquisition, Facebook said it plans to further integrate Giphy into the Instagram app “so that people can find just the right way to express themselves.”
Facebook has attempted to downplay the claims that the deal could reduce competition.
“Developers and API partners will continue to have the same access to Giphy, and Giphy’s creative community will still be able to create great content,” a Facebook spokesperson said in May last year.
“We are prepared to show regulators that this acquisition is positive for consumers, developers, and content creators alike.”