UK orders Facebook/Meta to sell Giphy following its private acquisition
Facebook/Meta needs to find an
Published: 30th November 2021 | Source: Competition and Markets Authority |
Meta hopes to challenge the Competition and Markets Authority's decision
In 2020, Facebook (now Meta) announced that they had acquired Giphy for $400 million, a popular GIF sharing platform that has access to a vast database of GIF images.
Today, the UK's Competition and Market's Authority (CMA) has ordered Meta to sell Giphy, stating that "by requiring Facebook [Meta] to sell Giphy, we are protecting millions of social media users and promoting competition and innovation in digital advertising."
Unsurprisingly, Meta disagrees with the CMA's decision, stating to the BBC that they "reviewing the decision and considering all options, including appeal."
Additionally, Meta has claimed that the CMA is "engaging in extraterritorial overreach", and that "the CMA is sending a chilling message to start-up entrepreneurs, 'Do not built new companies because you will not be able to sell them'". Presumably, Facebook/Meta believes that the purpose of startups is to be gobbled up by existing giants, and that their founders only create these companies with acquisitions in mind...
Meta believes that Giphy and its customers are "better off with the support of our [Meta's] infrastructure, talent, and resources." Stuart McIntosh, the man who chaired the CMA's independent inquiry into the acquisition disagrees, stating that not opposing the acquisition would "allow Facebook to increase its significant market power in social media even further, through controlling competitors' access to Giphy GIFs."
If the CMA's data is to be believed, Meta's social media apps, Facebook, Messenger, WhatsApp, and Instagram, already account for roughly 73% of social media user time. Meta's acquisition of Giphy gives Facebook an opportunity to further squeeze competitors like Twitter, TikTok, and Snapchat out of the market.
At this time, Meta has no intention of selling Giphy and will likely fight the CMA's decision.