Meta will have to sell Giphy by order of the UK authorities

Goal is ordered to sell Giphy, after two years of having acquired the platform. The UK Competition and Markets Authority is forcing Mark Zuckerberg’s company, which sets a precedent that could end up affecting WhatsApp and Instagram.

“Meta will have to undo one of his important acquisitions. The UK Competition and Markets Authority (CMA) regulator ordered Meta to sell Giphy after losing his battle in the Competition Court of Appeal”, collects Engadget.

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The reasons of the court is the reduction of competition with the acquisition of the platform. “While the CMA reviewed the decision in July after the court sided with Meta on one issue (sharing third-party confidential information), it found that the deal could still hurt competition by limiting rivals’ access to Giphy’s GIFs, requiring unfavorable terms and reducing digital advertising options”, adds the medium.

The objective of Mark Zuckerberg’s company was to improve its applications with this platform. “Meta bought Giphy in May 2020 at an unofficial estimated price of US$400 million. The company hoped the purchase would improve search for GIFs and stickers in Instagram Stories and direct messaging.“, Add.

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However, the UK authorities indicated that this would not be the only objective. “While the firm maintained that Giphy would be “openly available” to others, the CMA launched an investigation a month later and determined in August of that year that the purchase would harm competition in social media and advertising.. Meta has rejected those claims and appealed the November 2021 order to sell Giphy, arguing that the improvements would ultimately offer ‘more choice for everyone’.”, he indicates.

What worries Meta the most is that there are also investigations into purchases from other social networks. “The failure of the Giphy deal will not necessarily hurt Meta’s business. However, it comes as officials re-examine the company’s purchases of Instagram and WhatsApp.. The Federal Trade Commission has gone so far as to sue over the acquisition of workout app developer VR Inside due to concerns it could stifle the virtual fitness market.”, he concludes.

Source: Elcomercio

James

I have worked as a journalist for over 10 years and have written for various news outlets. I currently work as an author at 24 News Recorder, mostly covering entertainment news. I have a keen interest in the industry and enjoy writing about the latest news and gossip. I am also a member of the National Association of Journalists.