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Facebook Inc. will face an in-depth U.K. review of its US$400 million purchase of GIF search engine Giphy Inc. after it skipped offering concessions to address antitrust concerns.
The Competition and Markets Authority said it will run a so-called second-phase investigation through to Sept. 15, according to an emailed statement Thursday.
The decision comes after the watchdog warned the tie-up could harm rival social-media platforms. It’s cited concerns that the deal could allow Facebook to stifle the supply of Giphy’s library of video clips and animated videos on rival services such as Apple Inc.’s iMessage, Twitter, Signal, TikTok and others.
U.K. regulators are taking a tougher stance on technology deals where giants swallow up smaller firms. CMA officials have voiced regret for waving through game-changing deals in the past, such as Facebook’s takeover of Instagram. CMA Chief Executive Officer Andrea Coscelli said in October that the largest tech companies should face scrutiny for any transaction, no matter how tiny.
Facebook said in an emailed statement that it would continue to fully cooperate with the CMA.
“This merger is good for competition and in the interests of everyone in the U.K. who uses Giphy and our services -- from developers to service providers to content creators,” the social network added.
As part of its initial probe, the CMA said it discovered that Giphy had planned to expand its digital advertising partnerships to other countries.