ACCC plans new Facebook probe over Giphy Deal

The ACCC is examining Facebook’s proposed acquisition of imaging site Giphy. Picture: Supplied.

Australia’s competition regulator has launched an investigation into US technology giant Facebook’s acquisition of Giphy, a popular online platform where users can search for animated pictures.

The Australian Competition and Consumer Commission’s plans to raise its concerns with international regulators about the tie-up.

The ACCC investigation will examine whether the acquisition provides Facebook with data that will strengthen its market power in any markets and information about its social media and online private messaging rivals that may lead to a “substantial lessening of competition”.

The investigation will also examine whether the tie-up “could lead to the foreclosure” of Facebook’s social media and online private messaging rivals, including Apple, Twitter, Snapchat and Tic Tok.

The ACCC investigation comes three weeks after Facebook announced the acquisition of Giphy, which is being integrated with the group’s Instagram business.

The deal, signed last month, is a further boost to Facebook’s market power with 50 per cent of GIFs traffic already passing through Facebook apps.

Giphy has 750 million users a day and 300 billion images on its books. The images are, in effect, moving emojis.

ACCC chief Rod Sims told The Australian: “We are showing our interest in the completed deal in the hope that competitors including Apple, Twitter, Snapchat and Tic Tok will provide comments”.

Mr Sims expects the investigation to take a couple of months, adding that it has put “initial feelers out” to regulators in the US, UK and Europe but it’s too soon to have received any feedback.

The ACCC “works very closely” with international regulators, and will follow-up its concerns about Facebook’s acquisition of Giphy, he said.

“We’ll be very keen to have a two-way exchange with each of them to discuss this matter. I’d be surprised if others did not look at it as well.”

A Facebook spokeswoman said it was “prepared to show regulators that this acquisition is positive for consumers, developers, and content creators alike”.

“Giphy improves Instagram’s offerings by giving people more features and tools. 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.”

Facebook reportedly tried to buy Giphy two years ago for $US15m ($21.5m), but was rebuffed before the $US400m offer was accepted last month.

The relatively small size of the deal means US antitrust regulators will reportedly not be interested. Facebook did not notify the deal with US authorities before completion.

The ACCC last month called for help in drawing up a draft news media and digital platforms bargaining code that would force Facebook and Google to pay media companies for the news they carry on their platforms.

The ACCC’s concepts paper sets out a range of issues for which it wants feedback and information, including what should be included in the draft bargaining code and how particular issues should be addressed.

The ACCC is already looking at Google’s $US2.1bn Fitbit acquisition on similar competition grounds.

Fitbit probe delayed

However, the ACCC has again delayed its planned review of Google’s Fitbit takeover to consider more information from Google. The competition decision was delayed a week until June 18.

US and European agencies are also looking at the deal.

The action is at the centre of concerns over Google’s use of data to underline its control of search engines. It comes as a Californian class action has followed the US State of Arizona’s location data case alleging false and misleading behaviour.

The US actions follow the ACCC’s own action against Google. filed last October. That action won’t be heard in full until later this year.

The ACCC alleges Google collected, kept and used location data without allowing users to make an informed choice about whether to enable or disable the data.

It argues that in doing so, it engaged in misleading or deceptive conduct and made false or misleading representations to consumers.

The issue is about the use of data collected with Fitbit’s smartwatches and fitness devices to boost its online advertising powers and extend its control of search engines.

Earlier this year, the acquisition was billed by some in the US as a direct challenge to US antitrust authorities to take on the deal.

But Google and Fitbit are not direct competitors, which could arguably see the deal cleared.

Antitrust authorities are under attack for clearing past deals to allow Google to build its dominance, which is why Fitbit has assumed some importance.

In 2014, Google paid $US19bn for WhatsApp and in 2012 it paid $US1bn for Instagram.