by After the UK government tried to force the internet giant to reverse its acquisition of Giphy, an online search engine for animated photos, Meta, the parent company of Facebook, will sell up the website.
Since Meta’s economic dominance started drawing attention from antitrust regulators around the world, this is the first time regulators have been able to break off a piece of the technology giant.
The UK Competition and Markets Authority (CMAfinal )’s ruling on Tuesday puts an end to a protracted dispute with Meta over the deal’s potential effects on rivals’ access to GIFs and the digital advertising industry.
Even though Meta tried to defend the deal in court, UK officials mostly won the case when a tribunal agreed with the CMA that buying Giphy could hurt competition by getting rid of a competitor in online ads and making it harder for third parties to access Giphy’s GIF library.
Meta said Tuesday it would accept the UK’s ruling as “the ultimate word.”
A corporate spokeswoman stated, “We will work closely with the CMA on divesting GIPHY.” We are appreciative of the GIPHY team and wish them well during this challenging moment for their company.
Despite the loss, Meta said that it would keep investigating acquisitions.
The biggest players in the tech sector have long been accused by detractors of looking for “killer acquisitions” of smaller businesses. The purchases, they claimed, might solidify the larger players’ hegemony by stifling potential rivals.
The alleged “buy-or-bury” strategy is at the center of a US court case to force Meta to split WhatsApp and Instagram. The Federal Trade Commission’s plan to break up the company could go to court in 2024.
The FTC has also filed a lawsuit to stop Meta from buying Within Unlimited, a virtual reality technology business, on the grounds that the transaction might give Meta more leverage to build a “virtual reality empire.”
Meta is contesting both legal actions.
