Facebook parent company Meta has been ordered to sell Giphy — its online repository of video clips — by the U.K.’s antitrust watchdog. The Competition and Markets Authority (CMA) issued its final verdict on the $315 million takeover Tuesday, citing substantial lessening of competition in the social media and display advertising market. Meta must now find a suitable buyer. A Meta spokesperson said the company accepts the ruling as “the final word on the matter.”
- The CMA first ordered Meta to sell Giphy in November, but Meta appealed the decision. A U.K. court largely ruled against Meta’s appeal in June, putting the final decision back to the CMA.
- Following a three-month review, a CMA panel concluded the acquisition would enable Meta to further increase its market power.
“Scrutiny of big tech companies dominance has been ramped up by the UK agency since it gained new powers post-Brexit.”
Today, the UK’s Competition and Markets Authority has ordered Meta to sell its $400 million purchase of GIPHY, a popular GIF search engine. Specifically, the CMA cited the risk of a substantial lessening of competition in social media and display advertising.
Thus, they are forcing #Meta to “sell #GIPHY, in its entirety, to a suitable buyer.”
Last November, the CMA ordered Meta to divest Giphy after finding the combination of the two companies raised competition concerns.
Originally, Meta called the decision and findings “irrational” and appealed to a London Court. This appeal was kicked back to the CMA, and a CMA panel ruled the acquisition of Giphy would enable Meta to further increase its market power.
Individuals see this opportunity as a positive change. “This deal would significantly reduce competition in two markets,” Stuart McIntosh, chair of the independent inquiry group carrying out the remittal investigation, said in a statement.
However, this acquisition wouldn’t have been Meta’s largest deal yet – it’s spent larger sums on earlier deals ($1B acquisition of Instagram and $19B buyout of WhatsApp, for example).
This is the first time a global regulator has unwound a completed deal by a Big Tech company. The CMA is seeking to become a greater force in the battle among global regulators to rein in Big Tech companies. I’m curious to see if this precedent event will cause more and more governments to play more hands-on roles in big tech companies (we already see the US Congress often meeting with key stakeholders of different tech companies). Will this continue?
