Meta Stops Fighting Regulators and Agrees to Sell Giphy
Meta has decided to stop fighting the UK regulator over its $400 million acquisition of Giphy and will now proceed to sell Giphy's global operations.
The UK Competition and Markets Authority (CMA) released its final report(Opens in a new window) today regarding the acquisition and concluded(Opens in a new window):
"The CMA has found the completed acquisition by Facebook, Inc (now Meta Platforms, Inc) of GIPHY, Inc. may give rise to competition concerns in both the supply of display advertising in the UK, and in the supply of social media services worldwide (including in the UK). Facebook is required to sell GIPHY."
Matthew Pollard, a spokesperson for Meta, told The Verge(Opens in a new window), "We are disappointed by the CMA’s decision but accept today’s ruling as the final word on the matter. We will work closely with the CMA on divesting Giphy." He also confirmed that "divesting" means selling Giphy's operations globally.
The CMA started probing the acquisition back in 2020 due to antitrust concerns. In August 2021, it concluded that "Facebook’s merger with Giphy will harm competition between social media platforms and remove a potential challenger in the display advertising market." Meta decided to fight back, but was issued with a $68 million fine in October last year for deliberately witholding information. A year on, and Meta has decided to throw in the towel.
When Meta was still defending the deal, it argued that GIFs had fallen out of fashion(Opens in a new window) with younger users, who it said described GIFs as "for boomers" and "cringe." With that in mind, Meta was worried "interest today from suitable purchasers" will be much lower. In other words, Meta may find it difficult to sell Giphy without making a
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