AP Photo/Mark Lennihan
UK competition regulators have ordered Facebook parent company Meta to sell GIF database Giphy.
The Competition and Markets Authority said Tuesday that Meta's takeover of Giphy "could allow Meta to limit other social media platforms' access to GIFs, making those sites less attractive to users and less competitive."
Meta completed its purchase of Giphy in May 2020, with various news outlets putting the deal at between $300 and $400 million. Meta owns Facebook, Instagram, WhatsApp, and Oculus.
The CMA started probing the deal in June 2020 and in October 2021 it fined Meta $70 million, accusing it of not reporting all required information about how it was continuing to compete with Giphy.
The month after it ordered Meta to sell Giphy, which the social-media giant appealed.
In July, the UK's Competition Appeal Tribunal (CAT) upheld the CMA's decision on five of the six challenged grounds.
The CMA said Tuesday that it was issuing its "final decision."
As well as limiting other social-media sites' access to Giphy GIFs, the CMA said that Meta could change the terms of access and require customers including TikTok, Twitter and Snapchat to provide more data from UK users in order to access Giphy GIFs.
The merger would negatively impact the UK's display advertising market by removing Giphy as a challenger, the CMA said.
"The CMA has concluded the only way to avoid the significant impact the deal would have on competition is for Giphy to be sold off in its entirety to an approved buyer," it said.
"We are disappointed by the CMA's decision but accept today's ruling as the final word on the matter," a Meta spokesperson told Insider. "We will work closely with the CMA on divesting GIPHY ... We will continue to evaluate opportunities – including through acquisition – to bring innovation and choice to more people in the UK and around the world."
Bloomberg reported that this was the first time a global regulator has forced a Big Tech firm to go back on a completed deal.
