UK opens investigation of Facebook’s purchase of Giphy

The UK started a formal investigation of Facebook Inc.’s $400 million purchase of Giphy Inc., saying it will look at whether the deal hurts competition in the supply of video clips and animated images.

The Competition and Markets Authority set a deadline of March 25 for its initial decision, setting a timeline on a review that has already been marked by a court clash. Facebook had previously argued that the CMA imposed unreasonable and disproportionate restrictions on the company.

The CMA is increasingly voicing concerns about internet giants swallowing up smaller firms. Its Chief Executive Officer, Andrea Coscelli, said in October that the largest tech companies should face scrutiny for any transaction, no matter how tiny.