‘Disappointed’: Meta reacts after UK regulator orders it to sell Giphy

Bloomberg | | Posted by Aryan Prakash
Oct 18, 2022 05:18 PM IST

"We are disappointed by the CMA's decision but accept today's ruling as the final word on the matter. We will work closely with the CMA on divesting Giphy," a Meta spokesperson said in a statement.

Meta Platforms Inc.’s $315 million purchase of a GIF search engine is set to be blocked again by the UK’s antitrust watchdog bringing to an end years of uncertainty over the deal.

Facebook CEO Mark Zuckerberg.(AP)
Facebook CEO Mark Zuckerberg.(AP)

The Competition and Markets Authority said Tuesday it’ll order Meta to sell Giphy Inc. for a second time after an appeals court sent the decision back to the regulator for reconsideration. An appropriate buyer will be identified at a later date.

“We are disappointed by the CMA’s decision but accept today’s ruling as the final word on the matter,” a Meta spokesperson said. “We are grateful to the Giphy team during this uncertain time for their business, and wish them every success.”

Scrutiny of big tech companies dominance has been ramped up by the UK agency since it gained new powers post-Brexit. Its Digital Markets Unit, which will focus on policing the world’s biggest technology firms, is currently operating in shadow form, awaiting legislative approval from the government.

The decision comes after the CMA ordered Meta to unwind the deal last year following an in-depth probe which found the tie-up could have reduced competition between social-media platforms. Meta, which called the findings “irrational,” appealed to a London court. The transaction was then sent back to the agency for a fresh look after judges found concerns with the probe process.

“This deal would significantly reduce competition in two markets,” Stuart McIntosh, chair of the independent inquiry group carrying out the so-called remittal investigation, said in a statement. “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 divestment order marked the first time a global regulator has forced a Big Tech firm to unwind a completed deal.

It remains unclear who might be in the running to buy the GIF-maker. Giphy itself said that there was a lack of suitable interested purchasers, according to documents made public during the investigation. It said that there was a decline in the use of GIF’s since the deal was announced two years ago and they were now considered “cringe” and had “fallen out of fashion.”

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