Recently Facebook purchased Giphy for $400 million dollars, and while the two companies had been in talks about this prior to the COVID19 crisis, it may have played a role in speeding up Facebook's new acquisition.
Facebook bought Instagram for $1 billion in 2012, WhatsApp for $19 billion in 2014, Oculus VR for $2.3 billion in 2014. Considering all of these acquisitions, according to Axios, Facebook buying Giphy has the risk of sparking anti-trust scrutiny by regulators and state lawmakers for antitrust violations.
Can FB Use GIPHY to Spy on the Competition?
With Facebook's problems with privacy (eg SDK bug, Cambridge), it's possible competitor platforms that use GIPHY like Twitter, may not want to use GIPHY due to potential data collection efforts. FB can see emerging trends if a GIF starts trending & reverse engineer it for Facebook owned sites.
What this would look like is if say a GIF happened to be popular on Twitter, Facebook could simply remake this GIF, commission a few graphic designers and customize it for Facebook owned platforms like IG and WhatsApp.
Facebook has already been under fire for duplicating many features from Snapchat so it's not out of the realm of possibility.
Privacy Apps Like Signal May Ban GIPHY
This new merger also raises the question that if apps like Signal, whose main USP is that they are private will continue to allow use of Giphy. Many people are starting to see the value of their privacy amidst the hoards of data mining and cookie thieving going on.
Per The Verge, the Giphy API can be proxied to hide user information, so realistically, Facebook wouldn't have access to individual user stats. But, who knows, with technology for data mining continuing to evolve every year.
If the privacy of Signal is compromised by using Giphy, then it seems likely Giphy would not be very compatible with Signal and other privacy-centered apps.
Congress Aiming for Pandemic Anti-Monopoly Act
Congress wants to pass a Pandemic Anti-Monopoly Act that would impose a moratorium on large mergers until the FTC decides the we're not dealing with covid-related economic downturns.
The Act, introduced by Senator Elizabeth Warren (D-Mass.) and Representative Alexandria Ocasio-Cortez (D-NY- 14) states:
"The coronavirus disease 2019 (COVID-19) pandemic triggered an economic crisis that has hit small businesses especially hard, making them potential targets of large corporations seeking to increase their power through predatory mergers.
Reports suggest that private equity is planning to jump at the cheap opportunities; big tech has moved to snatch up struggling start-ups; and Rite Aid is looking to scoop up smaller pharmacies and PBMs.
Although antitrust agencies are tasked with defending open and fair markets by stopping anti-competitive mergers, their inability to aggressively take on concentration before the crisis began has further limited the federal government’s ability to respond effectively to the pandemic."
The Plot Thickens
It's clear that this new acquisition is multilayered affecting privacy, the economy, the free market, legislation, anti-trust laws and a society struggling with the effects of COVID19.
What are your thoughts on Facebook buying Giphy?
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