UK Orders Meta To Sell Giphy After Failed Appeal
Giphy logo displayed on a phone screen and Meta logo on a laptop screen. Photographer: Getty Images/NurPhoto
After a judgment in July affirmed the conclusion of Britain’s competition regulator that the acquisition of Giphy impeded innovation in the advertising market, Meta (META.O), owner of Facebook, was ordered to sell Giphy on Tuesday.
Giphy must be “sold off in its whole,” according to the Competition and Markets Authority (CMA), which previously decided that the acquisition would harm both competition and advertising.
After the US internet giant lost an appeal regarding the purchase, the regulator once more ordered the sale.
The watchdog claimed that the agreement will hinder innovation in UK display advertising and restrict choice for social media users in the UK.
In a final ruling, it stated, “The CMA has found that the only way to avoid the material adverse effect the transaction would have on competition is for Giphy to be sold off in its whole to an authorized buyer.”
Giphy serves as both a marketplace and a search engine for “stickers” and other GIF-based products.
In May 2020, Meta announced the acquisition, which was expected to cost $400 million.
According to Stuart McIntosh, head of the CMA’s inquiry group, “this acquisition would considerably lessen competition in two marketplaces.”
“The sale of Giphy is the only way to address this,”
The transaction, according to McIntosh, would “ensure UK social media users continue to benefit from access to Giphy” and “encourage innovation in digital advertising.”
Although Meta responded that it was disappointed, it would “respect today’s verdict as the final word on the case,” it stated.
A representative for Meta said, “We are grateful to the Giphy team during this uncertain period for their business, and wish them every success.”
We will keep looking into ways to give more people in the UK and around the world innovation and choice, including through acquisition.
One of the most popular GIF-sharing networks in the world, Giphy is situated in New York and has more than 700 million daily users.
The CMA fined social media giant Facebook, whose parent company is now known as Meta, more than £50 million in late 2021 for willfully withholding information about the merger.
