The UK Competition and Markets Authority said on Tuesday that Meta control of the popular search engine for GIFs (videos and short loop animations) would reduce competition between social media platforms and had already eliminated a potential rival to the advertising market.
Facebook, as Meta was then known, bought Giphy, reportedly, for $ 400 million in 2020. It intended to integrate the service with Instagram, making it easier for people to find GIFs relevant to their stories. and direct messages.
In its initial announcement of the deal, Facebook had pledged to grant third parties the same level of access to Giphy content as before. However, less than a month after the announcement of the acquisition, the CMA said it was investigating it.
While far from the biggest deal Meta has ever made, the acquisition of Giphy is the company’s first high-profile deal that government officials have canceled.
Facebook then said it disagreed with the CMA’s preliminary findings, arguing that its case had no evidence.
“As we have shown, this merger is in the best interest of people and businesses in the UK, and around the world, who use Giphy and our services,” a spokesman said in August. “We will continue to work with the CMA to address the misconception that the agreement harms competition.”
The finding is a blow to Meta’s aspirations amid intense antitrust scrutiny by governments around the world, and a possible red flag for other Big Tech companies pursuing acquisitions in this regulatory climate.
The CMA said in August that Giphy had planned to expand its growing advertising business in the UK before it was bought, a move that could have given UK brands a new way to promote themselves and create a challenger. direct for Facebook in the advertising market. .
“However, Facebook terminated Giphy’s paid advertising partnerships after the deal, meaning it has lost a significant source of potential competition,” the CMA said in a blog post.
– Brian Fung and Kaya Yurieff contributed to this article.
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