Facebook's (FB  ) buyout of Giphy will hamper competition in the United Kingdom's display advertising market and social media industry, according to provisional findings from the Competition and Markets Authority (CMA), the U.K.'s top antitrust watchdog.

"The only way to address the competition issues," surrounding last year's $400 million buyout by Facebook, is for the tech giant to sell off Giphy "in its entirety to a suitable buyer," reads a note published by the CMA on Thursday.

Facebook's initial buyout was not without controversy, as a lengthy court battle stalled Giphy's integration into Instagram and other apps under the Facebook umbrella.

The CMA's probe began one month after the May 2020 deal, and in January, an investigation began in earnest. After Thursday's announcement, the watchdog said it would field responses from interested parties and produce a final report on the matter on Oct. 6. The CMA could force Facebook to sell off Giphy, based on the findings of the report.

"We disagree with the CMA's preliminary findings, which we do not believe to be supported by the evidence," a Facebook spokesperson said. "As we have demonstrated, this merger is in the best interest of people and businesses in the U.K. -- and around the world."

Giphy offers a searchable catalog of short looping animations, called GIFs, standing for graphics interchange format. The CMA said that millions use Giphy across a wide array of social media platforms. The watchdog said that limiting the choice or quality of animations available on Snapchat (SNAP  ), TikTok, and Twitter (TWTR  ) might cause people to switch to Facebook or Instagram, hurting competition among social media platforms.

The CMA also noted that before its acquisition, Giphy had been planning to expand its display ad business to other countries, including the United Kingdom. "This [Giphy's expansion] would have brought a new player into the advertising market and a potential challenger to Facebook. It would also have encouraged greater innovation from others in the market, including social media sites and advertisers," the CMA said.

The CMA's announcement comes as antitrust authorities come to grips with the knock-on effects of the many mega-mergers they approved in the past. For instance, Facebook's buyout of Instagram continues to weigh heavily on regulators at the CMA and elsewhere.

But around the globe, and in the U.K. a new standard of scrutiny on big-tech buyouts is being set. Indeed, Andrea Coscelli, Chief Executive of the CMA, has said that big-tech companies should be held accountable for even the smallest of buyouts.