Back in 2020, Facebook (now Meta) bought Giphy, by which it became one of several mainstream platforms under its wing. But UK’s watchdog says enough. Competition and Markets Authority (CMA) has ordered Meta to sell the animated GIF platform – and the order is final.
The reason behind the ruling is that Meta’s purchase of Giphy limits the choice for social media users in the UK. Meta’s platforms already make up 73% of user time spent on social media in the UK, and Meta’s ownership of Giphy pushes people further to using Meta-owned sites, CMA concludes. In addition, Meta owning Giphy threatens to reduce innovation in the UK display advertising market. According to CNBC, CMA said on Tuesday that Meta must “sell GIPHY, in its entirety, to a suitable buyer.” However, it still hasn’t been disclosed (probably even decided) who the buyer is going to be.
In a statement regarding CMA’s decision, a Meta spokesperson said that the company was “disappointed by the CMA’s decision” but that they accept it “as the final word on the matter.”
“We will work closely with the CMA on divesting GIPHY,” the Meta spokesperson told CNBC. “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.”
CNBC notes that this is a landmark move, considering that this is the first time a global regulatory body has reversed a deal by a Big Tech company. This source adds that CMA is “seeking to become a greater force in the battle among global regulators to rein in Big Tech companies.” So, it looks like we can expect more moves like this in the future.
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