Meta will be giving up Giphy already purchased
Giphy, which was bought for more than 400 million dollars, is to be resold by Facebook’s parent company Meta.
The UK Competition Authority (CMA) ordered Meta to divest Giphy, a popular Gif creation platform, after Meta lost its case at the Competition Tribunal.
The CMA reviewed the decision in July after the tribunal agreed on the issue of Meta-sensitive third-party information sharing, but considered that the deal with Giphy could limit rival businesses’ access to Giphy GIFs and harm market competition.
Meta bought Giphy in May 2020 for an undisclosed estimated value of $400 million.
The acquisition of Giphy was intended to make it easier to find and create GIFs and stickers in Meta-owned Instagram’s Stories and Direct Messaging. Meta said others were free to use Giphy, but the CMA launched an investigation into the transaction a month later.
In August 2020, it was determined that the acquisition of Giphy could harm competition in social media and advertising. Meta denied the CMA’s allegations and in November 2021 objected to an order to sell Giphy back.
He also argued that buying Giphy and upgrading it would give everyone more options.
Before selling Meta, Giphy launched its own advertising service in countries including the UK.
The CMA also determined that since Meta owns Giphy, it can restrict/deny access to Giphy GIFs by other social networking platforms and increase its existing market power.
It also said that 73% of users’ time spent on social networks in the UK is currently on Facebook-owned social networking platforms.
Facebook controls nearly half of the $9.4 billion digital advertising market in the UK. The CMA said that Meta may change Giphy’s GIFs acquisition rules.
A spokesperson for Meta said he was disappointed by the CMA’s decision, but respected the outcome. He said that he will cooperate in the sale of Giphy.
The company also said it is considering continued acquisitions to provide more innovation and options.