A year and a half ago, specifically in May 2020, Facebook (now Meta) announced the purchase of the animated GIF platform, Giphy. The plans at that time were to generate the maximum integration with the company’s services and Apps, drawing the not inconsiderable sum of 400 million dollars.
Today, after all this time, the UK Competition and Markets Authority (CMA in English) truncated the plans of Mark Zuckerberg. This government entity finished his research and determined that Meta’s purchase of Giphy violates competition laws.
What did the CMA conclude? The Giphy acquisition reduces competition between social platforms and online advertising as Giphy was a rival to then-Facebook. What’s more, limited their access to other platforms and generated more traffic to Instagram, WhatsApp and Facebook. Likewise, it would affect the policies of use by other social platforms such as Twitter or TikTok, since they should provide more data to access Giphy files.
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A point that the CMA considered “worrying” was that Facebook when making the purchase, canceled Giphy’s advertising services. This considering that, in the United Kingdom, Mark Zuckerberg’s company controls half of the graphic advertising market and all Meta services represent 73% of the time that users spend on social networks within the United Kingdom.
Forced to sell Giphy
Finally, the authority only found a solution for Zuckerberg; sell in its entirety to Giphy to a buyer with a visa. And while Meta can appeal this decision, this European regulator is already setting a notable precedent in terms of purchases that large technology companies may make in the future.
Robin Koch, Director of Policy Communications at Meta for Europe, said that the company is considering all options, including appealing. Also adding that both companies can deliver an improved product for millions of people, businesses and developers around the world who use Giphy.
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