Meta has to sell Giphy again

Meta has to sell Giphy again. After months of dispute between the British competition authority and the Facebook group, the final decision has now been made.

The GIF platform Giphy has to leave the meta group. The British competition authority Competition and Markets Authority (CMA) has now in its “final decision“ fixed.

This was preceded by months of back and forth between Meta and the authorities. About a year ago, the company had already expressed competition law concerns about the purchase of the GIF platform.

The Story of Meta and Giphy

Meta – then still Facebook – only took over the GIF provider Giphy in mid-May 2020. At that time, around 400 million US dollars are said to have flowed.

It should be clear to users of the Meta subsidiaries Instagram and WhatsApp why Facebook founder Mark Zuckerberg wanted to acquire this company of all things.

Because GIFs now play a major role both in the messenger and on the social media platform. Be it for communication in the chat or the illustration of the Instagram stories.

What is the CMA complaining about?

But the luck of the Giphy takeover by Meta did not last long. Because as early as November 2021, the British competition authority required the sale of the GIF platform. She complained at the time “that the deal could harm social media users and British advertisers”.

Meta could restrict access to GIFs for other platforms by buying Giphy. This could make the affected platforms “less attractive to users and less competitive,” according to the CMA.

In addition, Giphy could “be eliminated as a potential challenger in the British market for display advertising” by belonging to the Meta group. As a result, British companies “cannot benefit from the innovations in this market”.

Meta then appealed. But that didn’t help much. Because in July 2022, the decision of the CMA was confirmed in five out of six points.

Meta must now sell again

In the past three months, the British competition authority has had further evidence analyzed by an independent panel.

After its assessment, the CMA concluded that Meta would be able to increase its already significant market power.

GIFs are “an important driver of user engagement on social media platforms”. There are billions of searches for Giphy GIFs worldwide every month.

Through his position, Meta could restrict access to Giphy for other platforms. This is problematic given that in the UK, Meta and its platforms already account for 73% of time spent on social media.

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