Meta considers appeal after CMA blocks Giphy purchase

Out-Law News | 02 Dec 2021 | 11:57 am |

Facebook parent company Meta is considering an appeal after the UK Competition and Markets Authority (CMA) ordered it to sell the animated images platform Giphy.

The CMA said Meta’s purchase of Giphy, completed last year for a reported $400 million, would reduce competition between social media platforms and in-display advertising.

Stuart McIntosh, chair of the CMA’s investigation into the deal, said: "The tie-up between Facebook and Giphy has already removed a potential challenger in the display advertising market.”

"By requiring Facebook to sell Giphy, we are protecting millions of social media users and promoting competition and innovation in digital advertising,” he added.

Meta, previously branded as Facebook, had planned to integrate Giphy’s functions into Instagram, the photo-sharing social media platform that it bought in 2012.

But the regulator said the deal meant Meta could also restrict its competitors’ access to Giphy-made GIFs and drive more traffic to its own sites - Facebook, WhatsApp and Instagram – which already account for 73% of user time spent on social media in the UK.

It also raised concerns that Meta terminated Giphy’s US-based advertising services at the time of the merger.

The CMA said the services could have been expanded into the UK, representing a possible source of competition for Meta, which controls nearly half of the £7 billion display advertising market.

A spokesperson for Meta said it disagreed with the CMA’s decision and is “considering all options.”

It has four weeks to lodge an appeal.