Facebook Ordered to Sell Giphy

CMA Ruling

UK's Competition and Markets Authority (CMA) instructed Facebook (now called Meta) to sell GIPHY, after concluding today that the recent acquisition "would reduce competition between social media platforms and that the deal has already removed GIPHY as a potential challenger in the display advertising market". [1]

The report noted that Facebook, which controls nearly half of the display advertising market in the UK, "terminated GIPHY's advertising services at the time of the merger, removing an important source of potential competition".

The social giant which is likely to appeal the decision, had been fined £50.5 million by the CMA in October, for failing to provide regular updates outlining its compliance with the wathdog's initial enforcement order (IEO). [2]

Giphy Acquisition

GIPHY joined Facebook as part of the Instagram team back in May 2020, with the relevant press release then noting that half of GIPHY's traffic comes from the Facebook family of apps. [3]

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GIPHY allows users to find and share GIFs, Stickers, Clips and more, which can be found within popular apps such as Facebook, Instagram, TikTok and others. [4]

Increasing Scrutiny

The Menlo Park firm has been under increasing regulatory scrutiny, along with other tech juggernauts in the US, with the Federal Trade Commission (FTC) filing renewed antitrust complaints during the third quarter of the year. [5]

This is part of an ongoing FTC case, in which the US regulator alleges that Facebook "is illegally maintaining its personal social networking monopoly through a years-long course of anticompetitive conduct" [5]

In October, it also saw a whistleblower testifying against it in the US Senate, prompting its CEO Mark Zuckerberg to hit back. [6]

Change into Meta

The Facebook company contains not only the namesake app, but also other popular platforms, mainly Instagram and WhatsApp. On October 28, it announced that it was changing its name to Meta [7], highlighting its efforts towards building the Metaverse, which is already underway and has generated quite some buzz.

Meta still trades as Facebook and as per the initial press release, it intended to change its ticker, starting form tomorrow December 1. However, it announced yesterday that the ticker symbol change is postponed until Q1 2022. [8].

Stock Movement

FB.us opens lower today, but heads towards a profitable November, halting its two-month drop, after the record highs set in September (384.49)

Its outlook is mixed as it the Relative Strength Index breaks below 50, but the stock traded above its EMA200 during the current month. This sustains its ascending aspirations, but November's high (354.01) appears distant at this point.

FB.us is vulnerable to a retest of the EMA 100 on the downside (at around 325.00) and daily closes below it will apply downward pressure.


Past Performance: Past Performance is not an indicator of future results.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 30 Nov 2021 https://www.gov.uk/government/news/cma-directs-facebook-to-sell-giphy

2

Retrieved 30 Nov 2021 https://www.gov.uk/government/news/cma-fines-facebook-over-enforcement-order-breach

3

Retrieved 30 Nov 2021 https://about.fb.com/news/2020/05/welcome-giphy/

4

Retrieved 30 Nov 2021 https://giphy.com/about

5

Retrieved 30 Nov 2021 https://www.ftc.gov/legal-library/browse/cases-proceedings/191-0134-facebook-inc-ftc-v

6

Retrieved 30 Nov 2021 https://www.facebook.com/zuck/posts/10113961365418581

7

Retrieved 30 Nov 2021 https://about.fb.com/news/2021/10/facebook-company-is-now-meta/

8

Retrieved 12 Aug 2022 https://www.prnewswire.com/news-releases/meta-postpones-ticker-symbol-change-to-q1-2022-301433214.html

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