Image source: TIME
Facebook’s parent company Meta is expected to sell Giphy as the UK plans to force the tech giant to complete the service acquisition.
Giphy is an American online database that users use to find GIFs for comments, messages, chats, and text messages on social media.
The announcement marks the first time regulators have stripped part of the tech giant since a global antitrust review probed the company’s dominance.
The decision was made on Tuesday.
The UK’s Competition and Markets Authority (CMA) decision sparked a long battle with Meta over the deal’s impact on competitors’ access to GIFs and the digital advertising market.
Meta went to court to defend the deal, but British officials prevailed over the summer.
The court upheld the CMA’s finding that the acquisition of Giphy could reduce competition by eliminating a competitor in online advertising.
The acquisition also limits third-party access to Giphy’s GIF library.
Facebook’s parent company issued a statement on Tuesday confirming that it would accept the UK’s decision as “the final word on the matter.”
A meta spokesperson clarified the statement:
“We will work closely with the CMA on divesting GIPHY.”
“We are grateful to the GIPHY team during this uncertain time for their business, and wish them every success.”
While this resulted in a loss, Meta said it would continue to explore acquisitions.
Over the years, critics have accused larger tech companies of seeking “killer acquisitions” from smaller companies.
Critics say the acquisitions could undermine the dominance of the biggest names, reducing potential competition in the industry.
In the United States, the “buy-or-bury” strategy is at the center of a federal lawsuit that forces Meta to split WhatsApp and Instagram.
The attempted Federal Trade Commission violation could lead to a trial in 2024.
Additionally, the FTC filed a lawsuit to block the social media giant’s acquisition of Within Unlimited, a virtual reality technology company.
They argued that the deal could give Meta more power to build a “virtual reality empire.”
Meta now faces both lawsuits.
Meta says it will sell Giphy to comply with UK breakup order