Meta will be forced to sell Giphy after losing its UK appeal

Meta will be forced to sell Giphy after losing its UK appeal

One of Meta’s big purchases will have to be unwound. After losing its case at the Competition Appeal Tribunal, the UK’s Competition and Markets Authority (CMA) regulator has forced Meta to sell Giphy. While the CMA reviewed the decision in July after the tribunal sided with Meta on one issue (sharing sensitive third-party information), it concluded that the agreement could still harm competition by restricting rivals’ access to Giphy GIFs, requiring unfavorable terms, and reducing digital advertising options.

Meta paid $400 million for Giphy in May 2020, according to unconfirmed estimates. The business believed that the acquisition will make it easier to locate GIFs and stickers on Instagram Stories and direct chat. While the company claimed that Giphy will be “openly accessible” to others, the CMA initiated an inquiry a month later and ruled that the acquisition would impair competition in social media and advertising in August of that year. Meta denied such assertions and filed an appeal against the November 2021 decision to sell Giphy, claiming that the upgrades would eventually provide “more alternatives for everyone.”

A Meta spokeswoman told Engadget that the firm was “disappointed” by the CMA’s decision, but that it would respect the judgment and work with the company to sell Giphy. The social network operator also said that it will continue to investigate acquisitions in order to bring more “innovation and choice.”

Meta’s company will not be harmed if the Giphy transaction fails. It does, however, come as regulators review the company’s acquisitions of Instagram and WhatsApp. The FTC has gone so far as to sue over the purchase of VR exercise software creator Within, citing fears that it would limit the virtual fitness sector. Meta’s penchant for acquiring firms is being scrutinized, and the Giphy purchase reversal will not relieve the pressure.

No votes yet.
Please wait...