Get into trouble. Facebook’s parent company could be forced to cancel the Giphy acquisition following a possible decision by the UK antitrust regulator.
According to Financial Times sources, the UK Competition and Markets Authority (CMA) has already decided to reverse the acquisition of Giphy and will communicate the decision in the coming days.
The CMA has a deadline to give a verdict until December 1.
Facebook announced in May 2020 that it was acquiring Giphy for $ 400 million. Antitrust regulators in the UK and Australia announced a month later that they were reviewing the deal.
The CMA issued an interim finding in August 2021 saying that the merger would hurt competition and that the only effective remedy would be for Meta to sell Giphy.
In that finding, the CMA said that control over Giphy could give Facebook an unfair advantage over rival social media platforms like Snapchat and TikTok, which also use this animated gif service. He also argued that the merger would eliminate Giphy as a potential competitor to Meta in the advertising industry.
Although Meta and Giphy are US companies, the CMA has jurisdiction over any acquisition in which the combined parties control more than 25% of a particular good or service supplied in the UK. The CMA said that together, Meta and Giphy would control an 80% to 90% market share of the libraries of searchable animated stickers.