The American multinational Meta, the parent company of Facebook and Instagram, will then have to sell the GIF website Giphy. The Competition and Markets Authority (CMA), the British market regulator, has decided this.
Meta appealed the decision, but that has now failed.
Meta acquired Giphy in May 2020 in exchange for $315 million and shares in Facebook. The CMA issued a court order in June 2020 to block the integration. In October 2021, the regulator subsequently fined Meta £50.5 million for continuing to integrate the two companies despite an ongoing investigation.
In November 2021, the CMA asked the social networking giant to sell Giphy. But Meta appealed that judgment to the court in London. At the April hearing, Meta said it had not yet received a firm offer for Giphy, which the company said showed that growth prospects in the UK advertising market were not very high.
The court has now decided that the sale of Giphy by Meta must occur. That is the “only way” to avoid a “significant impact” on competition, the CMA said on Tuesday. The takeover has “already led to the crushing of a potential competitor in the UK online advertising market,” it said. Before the sale to Facebook in 2020, the Belgian holding company Sofina was one of the shareholders of Giphy.
Giphy is a database of animated gifs for social media and chat apps founded in 2013 in New York. Giphy allows users to spice up chat conversations or messages on social media. The animations can also be used for commercials. For Facebook, the acquisition made sense. Half of all animations sent from Giphy end up on company apps or websites.
Meta says it is “disappointed” by the decision of the CMA, but it “accepts the final decision”.