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Buying Giphy Gives Facebook a New Window Into Its Rivals

Facebook announced Friday it was acquiring Giphy, a leading service for making and sharing GIFs that will now be part of Instagram, a leading service for making and sharing photos. Even if you’ve never visited Giphy’s website, you’ve likely seen its footprint on social media, dating apps, maybe even in your workplace on Slack. Founded in 2013 as a search engine for GIFs, Giphy soon expanded to tools that enabled millions of internet users to seamlessly embed the short animations on sites like Facebook and Twitter, helping to make “reaction GIFs” the core medium for digital expression it is today.

Facebook characterized the acquisition—reportedly worth $400 million—as a way to help its millions of users “better express themselves.” “By bringing Instagram and Giphy together, we can make it easier for people to find the perfect GIFs and stickers in Stories and Direct,” Vishal Shah, vice president of product at Instagram, said in the announcement.

The news was not uniformly celebrated across the web. Critics of Facebook’s track record on issues like privacy worried what would happen now that it controlled a beloved GIF service. “Many have reached out to ask whether we should be concerned about Giphy search in Signal,” tweeted Moxie Marlinspike, one of the app’s cofounders, before assuring users that the privacy-focused messaging service already prevents “GIF search providers from receiving user data.”

Within hours of the announcement, Giphy’s head of content was also on Twitter, dispelling rumors that the service was removing GIFs of Facebook CEO Mark Zuckerberg. “Want to clarify that this is not true as we only take down content that violates our guidelines,” he wrote. And with Giphy’s tools already integrated with so many Facebook competitors—including Twitter, Snapchat, Slack, Reddit, TikTok, and Bumble—it seemed reasonable to wonder how long that would remain the case.

Both companies said that Giphy’s outside partners will continue to have the same access to its library and API. The awkward GIFs your boss sends over Slack aren’t going away anytime soon. But now Facebook, ultimately, will be the gatekeeper for all those integrations, and it will have unprecedented insight into how people use GIFs.

Facebook says it will not collect information specific to individual people using Giphy’s API, but it will get valuable data about usage patterns across the web. Facebook’s suite of apps already made up a huge chunk of Giphy’s traffic—50 percent, according to the company—but now it can collect data from other platforms, many of them competitors, and possibly spot emerging trends. If Facebook realized a certain type of GIF was trending on Twitter, for example, it could commission an artist to make a corresponding collection exclusively for Instagram, luring more users there. Facebook has also been accused of copying features from rivals like Snapchat for years, and will now have insight into how their users interact with GIFs.

Facebook has a history of trying to learn more about its rivals through data-rich acquisitions. In 2013, it acquired the VPN app Onavo, and later used it to gather data about apps like the messaging platform WhatsApp, which it also bought the next year. Data from Onavo showed that people were sending far more messages a day on WhatsApp than on Facebook Messenger, which helped to justify paying $19 billion for the competing app. Facebook shut down Onavo in 2019, after it was criticized for using code from it to collect data about people as young as 13.

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Those incidents, among others, have drawn increasing attention from US regulators and lawmakers, who say they’re concerned about Facebook’s dominance. The company is already the subject of ongoing investigations into whether its practices qualified as anti-competitive. The Federal Trade Commission announced in February that it would begin investigating smaller acquisitions by Facebook and other tech giants over the last decade. Senator Elizabeth Warren (D-MA) has called for Facebook’s largest acquisitions to be unwound. And a deal like this might earn more scrutiny coming during a global pandemic: Last month, House antitrust chair David Cicilline (D-RI) said he wanted to push for a moratorium on mergers until the health crisis is over—although that, like most things in Congress, is mired in partisan debate.

Friday’s news raises other, maybe more immediate questions, like how Facebook will choose to moderate Giphy’s expansive library. There might not be orders to censor unflattering GIFs of Zuck, but there may be some scrambling to make sure both teams are on the same page when it comes to what’s allowed: Giphy’s set of Community Guidelines are far less extensive than Facebook’s. Many of Giphy’s GIFs are pulled from movies and TV shows, which presents a plethora of copyright concerns. “Facebook just bought the world’s largest archive of DMCA takedown requests,” Alex Stamos, Facebook’s former chief security officer, wrote in a tweet. “The due diligence memo must have been awesome.” Giphy already has a copyright policy, and Facebook said in its press release that “both our services are big supporters of the creator and artist community, and that will continue.”

Giphy is a media platform, whose value is derived in part from the work of independent artists and creators. It’s also a beloved service for internet users who have shared trillions of GIFs over the years when a simple, still emoji won’t do. Now it’s in the hands of Facebook, one of the biggest, most divisive companies to come out of Silicon Valley. That can lead to a future of nearly unfathomable reach and success. Just take Instagram, Giphy’s new home, which Facebook acquired in 2012 and is now one of the biggest platforms in the world. But Instagram also offers a glimpse at the flip side of that coin: its original founders are gone, and while the app is bigger than ever, the challenges it faces—from disinformation to being targeted by lawmakers like Warren—are bigger than ever, too.

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