UK Regulators Ordered Meta to Sell Giphy

A year and a half after Facebook announced its acquisition of GIPHY, UK’s competition regulator has ruled that the social media giant’s parent, Meta’s acquisition of Giphy should be unwound.   

In a press release, the Competition and Markets Authority (CMA) said that they decided after the investigation found an acquisition could harm competition and that its concerns “can only be addressed by Facebook selling Giphy in its entirety to an approved buyer.”  

The acquisition, according to CMA, could deny or limit other platforms’ access to Giphy GIFs and drive more traffic to Facebook and Instagram. This will potentially require other platforms to provide more data to access the GIFs.   

Finally, Giphy’s advertising services, which were shuttered due to the merger, could have competed with Meta’s.  

“The tie-up between Facebook and Giphy has already removed a potential challenger in the display advertising market,” said Stuart McIntosh, the chair of the independent inquiry group, referring to Meta.   

Adding, “Without action, it will also allow Facebook to increase its significant market power in social media even further, through controlling competitors’ access to Giphy GIFs. By requiring Facebook to sell Giphy, we are protecting millions of social media users and promoting competition and innovation in digital advertising,”   

Meta this is the first time the CMA has attempted to unwind an acquisition by a tech giant, the UK regulator’s decision sets precedent for tech purchases.  

While groundbreaking, the decision is not a complete surprise after the CMA’s preliminary findings report from August.  

Previously, Meta has disputed the competition concerns, suggesting that there was no chance of Giphy’s business becoming a competitor.   

In response, the company had argued that Giphy had “no meaningful audience of its own.”   

Meta said, when it announced the acquisition, that it provides 50 percent of all Giphy’s traffic. The company also said, “developers and API partners will continue to have the same access to Giphy’s APIs.”  

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