The CMA in the UK believes that Giphy being in sole possession of Meta would not bode well for other media platforms that rely on GIFs.
The competition and markets regulator in the UK is looking to block the acquisition of Giphy by Meta Platforms (formerly Facebook). In May last year, Meta Platforms acquired Giphy with plans to integrate the popular online GIF platform with its own photo-sharing app Instagram. At the time, American news website Axios reported that the deal was worth about $400 million. However, the UK’s Competition and Markets Authority (CMA) wants to undo this deal.
According to a report by The Financial Times, this is the first time the agency is interfering with a deal involving a Big Tech company. The Financial Times ascribed the information to sources close to the matter. The report also added that the CMA has generally increased pressure on Big Tech companies.
The CMA’s Investigation into the Meta Acquisition of Giphy Began in June This Year in the UK
The investigation by the CMA into Meta’s finalized acquisition of Giphy began back in June. Two months later, the UK competition regulator stated that the acquisition negatively impacted overall GIF web supply. As the regulatory agency put it, this led to a “substantial lessening of competition in social media and display advertising, harming social media users and businesses in the UK.”
Because Giphy plays a pivotal role in supplying GIFs to social media platforms, the CMA provisionally adjudged that Meta should sell Giphy. This is to avert the potential consolidation of power Meta stands to gain by solely and outrightly owning Giphy. In addition, this could also see other media platforms like TikTok and Snapchat forced to cede more of their data just so they can access GIF content. However, the CMA has between now and December 1st to change or double down on its decision. In response to the CMA’s initial provisional decree, Meta issued a statement that reads:
“We disagree with the CMA’s preliminary findings, which we do not believe to be supported by the evidence. As we have demonstrated, this merger is in the best interest of people and businesses in the UK — and around the world — who use Giphy and our services.”
Furthermore, the tech giant stated that it would continually work with the CMA in allaying some of these perceived “misconceptions.”
Regulator Looks to Step Up the Efforts on Regulating Big Tech
The CMA seems resolute in unwinding this deal as part of a broader stance in effectively policing Big Tech. In fact, the UK competition regulator is hosting a two-day summit starting today to further this campaign. Prominent among the event’s attendees are G7 competition heads who interface on managing tech businesses.
As of press time, both Meta and the CMA were yet to issue any official statements on the latest acquisition development. However, it is a well-known fact that both organizations have locked horns in recent times.
Only last month, the CMA slapped a £50.5 million fine on Meta for breaching an initial enforcement order. The said order was imposed during the CMA’s investigation into the acquisition of Giphy. In another instance, the UK regulatory body also issued a fine of £500,000 to the same company. This time, the offense was that the tech corporation changed its chief compliance officer at least twice without approval.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
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