Meta says it will sell Giphy after order from British competition watchdog

Facebook and Instagram parent company Meta says it agrees to a ruling by the British competition watchdog to get rid of the GIF library from social media Giphy.

A spokesperson for Meta, Matthew Pollard, said: The edge“We are disappointed with the CMA’s decision, but accept today’s ruling as the final word on the matter. We will work closely with the CMA on the divestiture of Giphy.” When asked if the divestiture would apply to all of Giphy’s international operations, Pollard replied, “Yes, this applies globally.”

Meta was originally sentenced to sell Giphy last year, but has appealed the verdict. Today, the UK Competition and Markets Authority (CMA) announced that Meta has failed on five of the six objections raised in its appeal. The CMA said the acquisition should be reversed because it “could allow Meta to restrict other social media platforms’ access to GIFs, making those sites less attractive to users and less competitive.”

In the past, the CMA’s divestment orders have led to companies sell only part of the global business, but Meta has confirmed it will sell the US-based Giphy in its entirety. In general, the CMA monitors such sales and assesses the suitability of potential buyers.

The CMA said Giphy had developed its own advertising services before it was launched by Meta. was bought

The CMA’s judgment was supported by a number of findings. An independent panel noted that Meta’s purchase of Giphy would allow it to increase its market power in multiple ways, including blocking rival social media sites from accessing its library of GIFs, or forcing them to surrender valuable user data. in exchange for access. The panel also noted that prior to the acquisition, Giphy had developed its own advertising services, which were instead included in Meta’s offering. The CMA said this was a competition problem as Meta already controls about half of the UK’s £7bn ($8bn) display advertising market.

“This deal would significantly reduce competition in two markets,” Stuart McIntosh, chairman of the CMA’s independent research panel, said in a press statement. “It has already resulted in the removal of a potential challenger in the UK display advertising market, while also giving Meta the opportunity to further increase its substantial market power on social media. The only way this can be addressed is through the sale of Giphy.”