LONDON (REUTERS) - Britain's competition regulator has told Facebook owner Meta Platforms to sell animated images platform Giphy after finding that the acquisition could harm social media users and British advertisers, dealing a blow to the US-based tech giant.

The Competition and Markets Authority said on Tuesday (Nov 30) the decision was in line with provisional findings that Facebook's acquisition of Giphy in May last year would reduce competition between social media platforms and in the display advertising market.

Facebook, recently rebranded as Meta Platforms, said it could appeal the authority's decision.

It is not the first time the Competition and Markets Authority has intervened in a major merger. In February, it said that Viagogo must sell part of Stubhub's international business as their merger would reduce competition in Britain.

"The tie-up between Facebook and Giphy has already removed a potential challenger in the display advertising market," said Mr Stuart McIntosh, chair of the independent investigation on Facebook-Giphy for the Competition and Markets Authority.

"By requiring Facebook to sell Giphy, we are protecting millions of social media users and promoting competition and innovation in digital advertising," he added.

Facebook said it disagreed with the decision.

"We are reviewing the decision and considering all options, including appeal," a spokesman for Meta said in a statement.

The Competition and Markets Authority in October fined the company about US$70 million (S$96 million) for breaching an order that was imposed during its investigation into the deal, having hinted in August that it may need Facebook to sell Giphy.

The authority began a probe into the deal in January this year, and in April referred it to an in-depth investigation.

Facebook bought Giphy, a website for making and sharing animated images, or GIFs, reportedly for US$400 million in May 2020 to integrate it with its photo-sharing app, Instagram. It has defended the deal and its proposals to the Competition and Markets Authority over Giphy.

Another major provider of GIFs is Google's Tenor.

The Competition and Markets Authority has been actively looking into big tech's monopoly.

Last week, Google pledged more restrictions on its use of data from its Chrome browser to address the Competition and Markets Authority's concerns about plans to ban third-party cookies that advertisers use to track consumers.

The Financial Times first reported the authority's plans to block the Facebook-Giphy deal.