Meta has been ordered to offload its Giphy business by the UK’s Competition and Markets Authority (CMA). In a ruling the CMA said takeover of the gif-creation website could harm social media users and advertising competition. It is the first time an acquisition of a tech giant was blocked in the UK.
Swati Bhat
Facebook parent Meta
In 2020 Meta acquired Giphy, the largest supplier of animated gifs to social networks such as Snapchat, TikTok and Twitter. In the early days of the CMA’s investigation Meta failed to cooperate, resulting in a 50.5. million pound fine.
According to the BBC, Meta had hoped its purchase of Giphy would improve finding gifs and stickers on its social networks Instagram, WhatsApp and Facebook. “While Meta maintained that Giphy would be ‘openly available’ to other social networks, the CMA's investigation found the buyout would harm competition in social media and advertising.
Meta appealed against this decision, but in July the Competition Appeal Tribunal found in the CMA's favour on all but one ground, which was related to third-party confidential information.
The CMA said Meta's ownership of Giphy would not only limit choice for those on social media but it would also reduce innovation in digital display advertising in the UK.
In a statement, Meta said it accepted the CMA’s decision: "We are grateful to the Giphy team during this uncertain time for their business, and wish them every success. "We will continue to evaluate opportunities - including through acquisition - to bring innovation and choice to more people in the UK and around the world."
Article source: BBC
