Image source: TIME
Facebook parent company Meta is set to sell Giphy as the UK plans to force the tech giant to complete its service takeover.
Giphy is an American online database that users use to find GIFs for social media comments, chats, and text messages.
The announcement is the first time regulators have pulled part of the tech giant since a global antitrust review probed the company’s dominance.
The decision was finalized on Tuesday.
The UK’s Competition and Markets Authority (CMA) decision sparked a long-running battle with Meta over the deal’s impact on competitors’ access to GIFs and the digital advertising market.
Meta went to court to defend the deal, but British officials prevailed over the summer.
The court upheld the CMA’s finding that the acquisition of Giphy could reduce competition by eliminating a competitor in online advertising.
The acquisition also restricts third-party access to Giphy’s GIF library.
Facebook’s parent company released a statement on Tuesday confirming that it would accept the UK’s decision as “the final word on the matter.”
A Meta spokesperson clarified the company’s statement, saying:
“We will work closely with the CMA on divesting GIPHY.”
“We are grateful to the GIPHY team during this uncertain time for their business, and wish them every success.”
Although this resulted in a loss, Meta remained optimistic and said it would continue to explore acquisitions.
Over the years, critics have accused big tech companies of seeking “killer acquisitions” from smaller companies.
Critics say the acquisitions could erode the dominance of the biggest names and reduce potential competition in the industry.
In the United States, the “buy-or-bury” strategy is at the heart of a federal lawsuit forcing Meta to split WhatsApp and Instagram.
The attempted violation by the Federal Trade Commission could lead to a lawsuit in 2024.
Additionally, the FTC has filed a lawsuit to block the social media giant’s acquisition of Within Unlimited, a virtual reality technology company.
They argued that the deal could have given Meta more power to build a “virtual reality empire.”
Meta now faces both lawsuits.
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