The CMA said that on July 30, it directed Facebook, Facebook U.K., Giphy and Facebook subsidiary Tabby Acquisition Sub to appoint a formal hold separate manager for Giphy in order to ensure its independence.
Facebook had not responded to a request for comment at the time of this post.
The CMA noted in its order that members of Giphy’s senior management team left the company upon completion of the merger, and that key Giphy employees received restricted stock units in Facebook.
The regulator added, “Further, the CMA considers there to be a general lack of independence of the Giphy business from Facebook resulting from certain provisions included in the Facebook employment contracts to which Giphy employees were transferred on completion of the merger.”
Facebook revealed its $400 million acquisition of Giphy in May, saying at the time that the GIF library and creator platform would be folded into Instagram, and that its library, application-programming interfaces and software-development kits would all remain available.