Here are some things you should know
- Meta will have to now divest Giphy in response to the CMA Order from the U.K.
- Meta’s acquisition of Giphy by Meta in 2020 caused problems with U.K. antitrust regulators in the year that followed, citing possible social media issues.
- Meta currently works alongside the CMA in the beginning of the Giphy selling process.
Meta accepted an order from the U.K. to sell Giphy GIF Maker.
The Verge reported that five out of six objections raised by Meta during the appeal to the order were rejected by the U.K. Competition and Markets Authority. A Meta spokesperson told The Verge, “We are disappointed by the CMA’s decision but accept today’s ruling as the final word on the matter. The CMA will continue to work with us on Giphy divestment.
Meta will sell US-based Giphy entirely as a result of this ruling.
Meta purchased Giphy in 2020 at $400 million. The company had problems the next year. Meta was ordered to sell Giphy by the U.K.’s CMA because the antitrust watchdog considered the purchase to be harmful for social media users in the United Kingdom and to advertisers. Meta may decide whether Giphy’s advertising tools can be used anywhere else on social media. Giphy had previously been working to develop its own ads services.
Stuart McIntosh (chair of CMA’s independent inquiry team) stated that Facebook (Meta), could increase “its already substantial market power relative to other social media platforms.”
Meta had a moment of clarity earlier this summer, when the Competition Appeal Tribunal found inconsistencies in the CMA’s investigation. The decision was taken to re-review. According to the CMA, Meta was not informed of Snapchat’s purchase of Gfycat. The decision by the CMA was to be made in October. We have since reached that conclusion.
This will ensure that both advertisers and users have a safer social media marketplace. As The Verge informs, Meta already controls around half of the U.K.’s £7 billion display advertising market.
