Meta forced to sell Giphy by UK Competition Council

Giphy, the GIF animation hosting service bought by Facebook in 2020, will have to change ownership. The UK Competition and Markets Authority (CMA) has ruled that the acquisition restricts competition in the market and Meta, the current owner, will have to sell Giphy to another buyer. It remains to be seen whether the sale can be made for a similar amount to that originally paid.

After two years, Meta will have to give up its purchase of Giphy

When Facebook bought Giphy, the company had big plans for it. So the $400 million figure didn’t seem very large compared to the company’s other acquisitions. The reason for buying Giphy is to integrate animations like this across Meta platforms: in Stories and Messenger, where they are used to decorate photos or videos posted, or serve as reactions.

But UK authorities believe the acquisition could limit competition in the GIF service space, as Facebook rivals could have access to Giphy services revoked, or restricted, or even conditioned on unfavourable themes. Also, with Giphy in its portfolio, Facebook would reduce the number of options for advertising in the digital space, as the animation platform is also used for these purposes.

Facebook promised at the time of the acquisition that Giphy would remain available to everyone and that it would be an “open” platform, but the CMA investigation decided not to trust the company’s promises.

As expected, Meta representatives say they are disappointed by the outcome:

“We are disappointed with the CMA’s decision, but accept the ruling as the final word on this case. We will work closely with the CMA on the sale of Giphy. We are grateful to the Ghiphy team at this uncertain time for their business and wish them every success. We will continue to evaluate new opportunities, including through acquisitions, to bring innovation and choice to more people in the UK and around the world.”