LONDON (Reuters) – Britain’s competition watchdog ordered Facebook owner Meta on Tuesday to sell animated image platform Giphy after a court upheld its view that the takeover could harm rivals and eliminate a potential competitor in advertising.
Meta said he would accept the order from the Competition and Markets Authority (CMA) to reverse the 2020 deal.
“We are disappointed by the CMA’s decision, but accept today’s ruling as the final word on the matter,” a Meta spokesperson said in a statement. “We will work closely with the CMA on the sale of Giphy.”
The ruling was the first time a regulator had forced a US tech giant to sell an already acquired company, and marked a new determination to scrutinize digital deals.
Regulators around the world have been increasingly proactive in reining in big business.
US antitrust regulators filed a lawsuit in early October against Meta’s acquisition of virtual reality content maker Within Unlimited Inc, saying it “would tend to create a monopoly” in the virtual reality app market. fitness dedicated to VR.
The European Union has been at the forefront of this battle against the tech giants, setting landmark antitrust and privacy rules and doling out billions of dollars in fines to force changes to their business models.
The UK regulator had blocked Giphy’s deal, valued at $400 million, in November 2021 over concerns that Meta could deny or limit competitors like Snapchat and Twitter’s access to Giphy’s GIFs.
It was also concerned about losing a potential competitor in display advertising, even though Giphy had no presence in the industry in Britain.
The CMA had noted that UK users search 1 billion GIFs a month on Giphy, and 73% of the time they spend on social media was on Meta’s Facebook, Instagram and WhatsApp.
Meta appealed the ruling, but a court upheld the CMA’s decision on five of the six grounds in June.
The CMA said it had considered new submissions from Meta and Giphy and additional evidence since the appeal, but had not changed its mind.
“This deal would significantly reduce competition in two markets,” said Stuart McIntosh, president of an independent research group.
“It has already resulted in eliminating a potential competitor in the UK display ad market, while also giving Meta the ability to further increase its substantial market power on social media.”