US social media giant Meta, Facebook’s parent company, will have to sell its animated illustration subsidiary Giphy following a final decision by the UK competition regulator and a failed appeal.
“The only way to avoid a significant impact” from Meta’s acquisition of Giphy on competition is to “sell the company outright,” British watchdog CMA said in a statement on Tuesday.
For Meta, this purchase was a way to integrate Giphy’s huge library of animated images, or “gifs,” into Instagram , its photo- and video-sharing app.
However, for the CMA, this merger “would substantially reduce competition in two markets and has already led to the elimination of a potential competitor in the UK online advertising market.”
The agency considered in November last year that the acquisition, made in May 2020 for 315 million dollars, could harm both advertisers and online users and ordered its sale.
The American giant had appealed said decision and on Tuesday reacted to the new announcement declaring itself “disappointed by the decision of the CMA”.
“However, we accept his final decision on the matter,” he said in a statement received by AFP . “We will work closely with the CMA on the sale of Giphy,” he added.
“We will continue to assess opportunities – including through acquisitions – to bring innovation and choice back to more people in the UK and around the world,” the social media giant concluded.
At the April appeal hearing, Meta’s lawyers argued that the US giant had not received any firm offer to buy Giphy from it.
This, according to them, showed that their growth prospects in the UK advertising market were not necessarily as important as the CMA argued.