Meta appeals against UK watchdog ruling that it must sell Giphy
Facebook’s parent company Meta is appealing against a decision by the UK’s competition watchdog ordering it to sell Giphy.
Last month the Competitions and Markets Authority (CMA) ordered Facebook to sell off Giphy which it purchased for $400m in May 2020, the first time it has ordered a tech company to unwind a deal. Meta today revealed it would be appealing against the decision Reuters first reported.
“We are appealing the CMA’s Giphy decision and will seek a stay of the CMA’s order to divest,” a Meta spokesperson told Reuters.
“The decision to block the deal is wrong on the law and the facts, and the evidence does not support the CMA’s conclusions or remedy,” the spokesperson added.
The regulator blocked the deal after it determined that the takeover of Giphy resulted in a substantial lessening of competition in social media and display advertising, harming social media users and businesses in the UK.
The independent panel reviewing the merger concluded that Facebook, also known as Meta, would be able to increase its already significant market power in relation to other social media platforms by denying or limiting other platforms’ access to Giphy GIFs. This would drive more traffic to Facebook-owned sites like WhatsApp and Instagram, which already account for 73 per cent of user time spent on social media in the UK.
In a bid to placate the regulator Meta said it would not restrict access for its competitors or collect data from the use of GIFs, even offering to make the requirement legally binding. However, the CMA rejected the remedy in part because it would require ongoing monitoring.
Read more: The CMA’s showdown with Facebook over Giphy foreshadows a crackdown