Britain’s Competition and Markets Authority last year ordered Meta to sell Giphy, which it acquired in 2020
Britain’s Competition and Markets Authority last year ordered Meta to sell Giphy, which it acquired in 2020
Facebook owner Meta appealed the UK’s decision to sell Giphy on Monday, arguing that rival Snap offered far less to buy the animated image provider, undermining the rationale used to block the deal became.
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The UK’s Competition and Markets Authority (CMA) last year ordered Meta to sell Giphy, which it acquired in 2020.
It said the deal removed a potential competitor in display advertising based on the possibility that Giphy’s fledgling ad or “paid alignment” business could become significant.
The deal could also allow owners of Facebook, Instagram and Whatsapp to restrict competitors’ access to GIFs, it said.
The ruling – the first block of a major digital takeover by the UK regulator – signaled a sea change in how big tech is scrutinized.
On the first day of a four-day hearing before the Competition Appeal Tribunal, Meta’s attorney, Daniel Jowell, said the CMA had withheld for 14 months the fact that Meta’s rival Snap had made an informal offer to buy Giphy, and matched it internally at $142 million rated.
That was less than half of the $315 million offered by Meta.
Snap’s low valuation indicated that, like Meta, it believed Giphy’s ads business had no real potential, he said.
Jowell said the CMA did not ask Snap if it placed any value on Giphy’s ad business — a procedural error in itself — but that it was clear that “that was not Snap’s motivation for having an interest in buying Giphy.” “.
Snap later acquired Gfycat, a competitor to Giphy.
Jowell said that Giphy’s US revenue was less than 0.05% of Meta’s ad revenue — “literally tiny” — while Giphy didn’t sell any ads in the UK or elsewhere.
A Meta spokesperson said information released Monday supported his argument that the deal encouraged competition and improved selection.
“The decision to block the deal is incorrect in law and in fact, and the evidence does not support the CMA’s conclusions or remedies,” the spokesman said.
The CMA said it will “vehemently” defend its decision.
“This merger combines Meta’s significant market power in display advertising and social media with Giphy’s position as the leading provider of free GIFs and GIF stickers in the UK,” said a spokesperson.
“By requiring Meta to sell Giphy, we encourage competition and innovation in digital advertising and ensure that competing social media providers get competitive access to Giphy’s services – to the benefit of UK consumers.”
