Bye-bye: Meta has again been ordered by the UK’s competition watchdog to sell animated GIF platform, Giphy. And this time it’s final.
The decision follows a ‘stay of execution’ for Meta this summer, after the U.K.’s Competition Appeal Tribunal sent the case back to the antitrust regulator to be reassessed following a procedural finding that the Competition and Markets Authority (CMA) had not provided full, un-redacted disclosure to Meta representatives of documents related to its decision.
But the tribunal upheld the CMA’s decision on five of the six challenged grounds — saying it had “no hesitation” in concluding that the regulator’s finding that the merger substantially reduced dynamic competition was lawful. So today’s news should shock precisely no one.
The CMA’s reassessment affirms its earlier view that Meta’s purchase of Giphy would limit choice for UK social media users and reduce innovation in UK display advertising.
In a press release announcing the final decision, the CMA said its independent panel has spent the last three months analyzing additional third-party evidence and new submissions from Meta and Giphy.
The review concluded that Meta would be able to increase its already significant market power by
- denying or limiting other social media platforms’ access to Giphy GIFs, thereby pushing people to Meta-owned sites, which already make up 73% of user time spent on social media in the UK, or
- changing the terms of access – for example, it could require Giphy customers, such as TikTok, Twitter and Snapchat, to provide more data from UK users in order to access Giphy GIFs.
In a statement, Stuart McIntosh, chair of the independent inquiry group carrying out the remittal investigation, added:
“This deal would significantly reduce competition in two markets. It has already resulted in the removal of a potential challenger in the UK display ad market, while also giving Meta the ability to further increase its substantial market power in social media.
“The only way this can be addressed is by the sale of Giphy. This will promote innovation in digital advertising, and also ensure UK social media users continue to benefit from access to Giphy.”
The CMA’s original decision ordering Meta to unwind the acquisition of Giphy was issued almost a year ago — back in November 2021 — which was well over a year after Meta completed the purchase of Giphy, in May 2020, in a deal reportedly worth $400m.
Reached for comment, Meta confirmed it will not be appealing the decision.
“We are disappointed by the CMA’s decision but accept today’s ruling as the final word on the matter,” said a spokesperson in an emailed statement. “We will work closely with the CMA on divesting Giphy. 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.”
The tech giant is facing dialled up antitrust scrutiny across many markets injecting friction into its operations — including on home turf the US, where the Federal Trade Commission has been seeking to block its acquisition of VR fitness firm, Within.
Meta gets final order to sell Giphy from UK antitrust watchdog by Natasha Lomas originally published on TechCrunch
