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Facebook Now Owns The Web’s Biggest Supplier Of GIFs: Is That A Problem?

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When, in February 2013, Alex Chung and Jace Cooke, during a relaxed breakfast conversation about how boring many conversations on the web were, decided to create a search engine for animated GIFs, they never thought that such a simple idea would become one of the most visited and fastest-growing sites on the web. However, when in the first week of its creation, the site attracted more than one million users, they began to realize they were on to something. In August, they expanded so that users of first Facebook, then Twitter, and later, after a $2.5 million investment round, many more sites could insert these short sequences of images associated with feelings and concepts of all kinds in the middle of their conversations.

A second investment round that same month took its valuation to $80 million, and the company continued to add features, make some acquisitions, and, above all, grow: by 2016, it boasted 100 million active users and more than one billion GIFs daily, with its users viewing two million hours of “content” every day. Their original intuition was right: not only were conversations boring and animated GIFs could provide them with some color, but they were also becoming the universal language of emotions, which could be easily understood by virtually any speaker of any language.

In March 2018, Google acquired a similar, smaller service, Tenor. And finally, on May 15, 2020, Facebook announced the acquisition of Giphy for a total of $400 million, in order to integrate its functions within Instagram. Some applications such as Zoom temporarily suspended integration with Giphy, while Instagram’s director, Adam Mosseri, foreseeing regulatory obstacles for the operation, insisted that “the acquisition had nothing to do with data”.

Sure enough, on April 1, the British antitrust authorities announced an investigation into the acquisition: according to their preliminary conclusions, Facebook’s ownership of Giphy may not only make it possible for the supply of this type of formats to be controlled, and with it the possibilities of other social platforms to compete with the hegemonic Facebook, but also to become another tool for collecting data both on its users and on the dynamics of use of rival social platforms. By now, Giphy is integrated into all sorts of sites — Twitter, Snapchat, Slack, Reddit, TikTok, Bumble, PayPal, Signal and many others — and it’s not the first time Facebook has used APIs or statistics from one of its services to obtain non-public information about the usage of its competitors’ tools.

What can Facebook know about you based on the animated GIFs you use in its apps or third-party apps? What can it associate that data with? Would it take Facebook long to create and popularize a similar service on its own if the acquisition were rolled back?

Not so long ago, such a transaction would have gone completely unnoticed by regulators. Now, with the climate of increasing interest in regulating the activities of big tech, this is no longer the case: scrutiny of any transaction is much more intense and thorough, and seeks to assess all possible implications that could help cement its leadership position. Big tech’s deep pockets mean it can acquire or copy anything it sees on the net and immediately incorporate it into its arsenal. This is a problem for the innovation and competition landscape. And hence the investigation by the British authorities: the absolute and undisputed leader in social networking acquires the leader in search and selection of animated GIFs, one of the most thriving tools for all kinds of expression and communication on the web. What could possibly go wrong?

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