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UK antitrust authorities ordered Facebook’s Meta to sell Giphy

UK antitrust authorities ordered Facebook’s Meta to sell Giphy

Social media giant Meta, formerly known as Facebook, has reportedly been ordered to sell Giphy, the looping short animations and video platform, by the UK antitrust authorities as the unison could impact competitors.

The UK Competition and Markets Authority (CMA) warned that Meta's purchase of the prominent GIFs search engine, short, loop animations, and videos, would reduce competitiveness among social media apps as it already removed one potential advertising competitor.

In 2020, Facebook (FB) purchased Giphy for approximately $315 million. The social media company intended to link Instagram to Giphy, making it accessible for users to locate relevant GIFs for their stories and direct messages.

Despite being far from Meta's largest purchase, the Giphy deal is the company's first high-profile deal that government officials have attempted to overturn.

The announcement is a holdup for Meta in the face of rising antitrust scrutiny from authorities across the globe, as well as a looming red flag for other Big Tech companies looking to make acquisitions in this regulatory environment.

The CMA has established that its competitiveness issues can only be resolved by Facebook selling Giphy in its totality to an authorized buyer.

Meta stated this week that it disagrees with CMA and was taking account of every option, including appeal.

Prior to the merger, Giphy had launched an advertising services which it planned to expand to countries like the UK. Through this service, the company allowed brands like Dunkin' Donuts and Pepsi to promote their brands through visual images and GIFs, which apparently could have rivaled with Facebook's display advertising services.

As per the CMA, Facebook put off Giphy's advertisements at the time of the merger, thereby removing a substantial source of potential competition.

The authority said it considers this merger particularly concerning as Facebook dominates nearly half of the US$9 billion display advertising industry in the UK.

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Sunil Jha

Sunil Jha has been a part of the content industry for close to two years. Having previously worked as a voice over artist and sportswriter, he now focuses on writing articles for, across a slew of topics, ranging from technology to trade and finance. With a business-oriented educational background, Sunil brings forth the expertise of deep-dive research and a strategic approach in his write ups.