Britain’s antitrust regulator blocked Giphy’s purchase by Facebook and ordered the social network to sell the GIF-sharing platform, claiming the deal hurts social media users and advertisers by stifling competition for animated images.
The Competition and Markets Authority noted that the agreement would allow Facebook, which has been renamed Meta, “to increase its already significant market power” by denying or limiting other platforms’ access to Giphy GIFs and redirecting traffic to the webs owned by Facebook.
This would be the first time the agency has tried to undo a technology deal.
After consulting with other companies and groups and evaluating alternative solutions presented by Facebook, the regulator said it “concluded that its competition concerns can only be addressed by Facebook if it sells Giphy in its entirety to an approved buyer.”
“By requiring Facebook to sell Giphy we are protecting millions of social media users and promoting competition and innovation in digital advertising,” said Stuart McIntosh, president of the group that conducted the research.
Giphy’s library of short looping videos, or GIFs, is a popular tool for messages and posts from netizens on social media.
The two sides had fought an uphill battle over the deal, which is reportedly valued at $ 400 million.
The Competition and Markets Authority said in an interim decision in August that Facebook should be forced to sell Giphy. The social media giant responded with a letter stating that the decision contained “fundamental errors.”
Facebook did not immediately respond to a request for comment on the decision by Britain’s Competition and Markets Authority.
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