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The UK’s Competition and Markets Authority (CMA) is expected to block Facebook’s $400m acquisition of GIF company Giphy, according to the Financial Times.

The move would mark the first time the competition regulator has reversed a Big Tech deal that has already gone through.

Facebook, which recently rebranded to Meta, bought Giphy in May 2020 and planned to integrate the GIF-making company into its photo-sharing app Instagram.

New York-based Giphy’s database allows users to share GIFs via its own website or app or through other platforms such as Facebook or Twitter.

The deal could be blocked as soon as this week, the FT reported.

The CMA declined to comment on the story. The deadline for its decision is 1 December.

In January this year, the CMA launched the first phase of its investigation into the deal. In March, it raised concerns about the impact it would have on the digital advertising market.

The CMA said that the merger could give Giphy “less incentive to expand its digital advertising, leading to a loss of potential competition”.

A Meta spokesperson declined to comment on the news but referred UKTN to its previous statement on the CMA’s preliminary findings.

“We disagree with the CMA’s preliminary findings, which we do not believe to be supported by the evidence,” the spokesperson said. “As we have demonstrated, this merger is in the best interest of people and businesses in the UK – and around the world – who use Giphyand our services. We will continue to work with the CMA to address the misconception that the deal harms competition.”

In October this year, the CMA fined Facebook £50.5m for failing to comply with an order to provide full updates about the Giphy acquisition and not integrate the company while investigations were ongoing.

Facebook has a 50% share of the UK’s £5.5bn display advertising market, the CMA previously found.

Reports that Facebook will be blocked from acquiring Giphy come as regulators play catch up to acquisitions by larger tech companies that further cement their dominance, such as Facebook’s acquisitions of Instagram and messaging app WhatsApp.

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