The UK Watchdog Forces Meta To Sell Giphy

The UK Competition and Markets Authority (CMA) announced Meta ownership over the Giphy could harm the competition. So Meta should sell the GIF platform. But the ruling may change.

Dates back to 2020, Meta bought Giphy for $400 million, and now all Meta platforms are using Giphy animations. However, the CMA believes this acquisition is harmful to the competition in the market. The verdict is announced Tuesday, and Meta has appealed it.

The CMA ruling seems justified, and there is no way to bypass it. The UK regulator says Giphy is one of the few GIF platforms, and Meta’s control over it can create a monopoly. In 2021, CMA officially told Meta to sell Giphy, and Meta failed to convince the regulator.

In a statement provided to Android Central, Meta said CMA’s approach to the case was “difficult to defend.”

“We look forward to understanding how these serious process flaws will be addressed. We firmly believe our investment would enhance GIPHY’s product for the millions of people, businesses, and partners who use it.” Meta said.

There is still some hope for Meta to avoid selling Giphy

However, there is only one thing that the CMA could be wrong about. According to the Competition Appeal Tribunal (CAT), the CMA has withheld information crucial to Meta’s case. In the same year that Meta acquired Giphy, Snapchat‘s parent company, Snap, also acquired a similar GIF platform.

The CMA reportedly withheld this information from Meta. Also, the tribunal says this move “undermines the entirety of the Decision.”

“We stress that we make absolutely no decision in this regard because we consider that we need to hear further from the parties on the consequences of the procedural failure that we have identified and, in particular, on the question as to whether that failure obliges us to remit the Decision to the CMA for fresh consideration.” Meta noted.

Although the CMA ruling seems certain, Meta may still have a chance to keep Giphy. The company hopes to change the ruling through an appeal. The CMA also recently accused Google and Apple of “effective duopoly.”