Social media giant Meta, Facebook’s parent company, will finally have to sell its animated illustration subsidiary Giphy following a final decision by the British competition watchdog and the failure of an appeal procedure.
“The only way to avoid a significant impact” from the social media giant’s acquisition of Giphy on competition is to “completely sell off” the company, the British Competition Police, CMA, wrote in a statement on Tuesday. press.
Facebook’s acquisition of Giphy “would substantially reduce competition in two markets and has already resulted in the elimination of a potential competitor in the UK online advertising market,” the CMA argues.
Meta “disappointed”
She had estimated in November that this $315 million May 2020 acquisition of Facebook shares risked hurting advertisers and online users and had ordered its sale for the first time.
“We will work closely with the CMA on the divestment of Giphy,” he adds.
We will continue to assess opportunities, including through acquisitions, to bring innovation and choice to more people in the UK and around the world.
During the appeal trial in April, Meta’s lawyers argued that the platform had not received a firm offer to buy Giphy, which they said showed its growth prospects in the UK ad market were not necessarily stratospheric.
Snap, parent company of the Snapchat social network, had considered an alternative proposal for 142 million dollars, but the latter had finally set its sights on Gyfcat, a Giphy competitor platform, a source close to the file explained to AFP.
According to the same source, the presence in the market of Gyfcat, but also of Tenor, which belongs to Google, could also guarantee the access of other platforms to “gif”, images of animated illustrations, which was another fear of the CMA.
For Meta, this acquisition was, in particular, a way to integrate Giphy’s huge library into Instagram, its photo and video sharing service.
Founded in 2013 and based in New York, Giphy is one of the leading gif-sharing platforms, with over 700 million daily users.
In October 2021, the CMA also fined Meta in the context of the Giphy merger £50.5m for continuing to integrate the two companies despite an ongoing investigation.
In fact, it had issued a court order in June 2020 to stop the integration process between Facebook and Giphy, whose acquisition had been announced in May 2020 and was estimated at 400 million dollars.
Source: BFM TV
