Facebook’s parent company Meta has been forced by the UK’s Competition and Markets Authority (CMA) to sell Giphy.
This decision is disappointing for Facebook after the final verdict by the CMA for the social media giant to “sell GIPHY, in its entirety, to a suitable buyer.”
A spokesperson told CNBC that Meta “is disappointed by the CMA’s decision but accepts today’s ruling as the final word on the matter.”
“We will work closely with the CMA on divesting GIPHY,” the Meta spokesperson continued. “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 CMA had reasons to be concerned about. The UK regulators saw the acquisition as anti-competitive. Before Facebook had plans to acquire Giphy, the people at Giphy had already launched its own advertising services and were planning to expand outside the United States. However, Facebook shut down Giphy’s advertising services when it purchased the company. As of last year, nearly half of the UK’s £7 billion ($7.9 billion) display advertising market has been under Meta’s control.
The CMA stated that it had concluded that Meta’s purchase of Giphy would have prevented other social media businesses from accessing the platform’s GIFs and would instead push users to Meta’s own services.
[Sources]: CNBC: Facebook parent Meta admits defeat after $400 million Giphy deal is blocked by UK regulators – [Archive] – [Screenshot]. Gov.UK: CMA orders Meta to sell Giphy – [Archive] – [Screenshot]; Facebook, Inc (now Meta Platforms, Inc) / Giphy, Inc merger inquiry – [Archive] – [Screenshot].