UK Competition and Markets Authority (CMA) ordered Meta to sell its animated image-making unit Giphy. The owner of Facebook admitted the defeat on Tuesday after UK regulators issued a final verdict. CMA cite the risk of a substantial lessening of competition in social media. Also, display advertising market, and said, ‘’Meta must sell GIPHY in its entirety, to a suitable buyer.’’ Though, it’s not clear which company will buy Giphy.
Meanwhile, Meta spokesperson said that they have accepted the decision but it was ‘’disappointed.’’ He adds, “We will work closely with the CMA on divesting GIPHY. We are grateful to the GIPHY team during this uncertain time for their business and wish them every success. We will continue to evaluate opportunities – including through acquisition. To bring innovation and choice to more people in the UK and around the world.”
CMA is seeking to become a greater force in the battle among global regulators
It’s for the first time UK regulators have blocked an acquisition by a tech giant. UK regulators believe that it will limit the choice for UK social media users, therefore, Meta must sell its unit. The CMA is seeking to become a greater force in the battle among global regulators to rein in Big Tech companies.
CMA reviewed the whole situation and found that there is one solution to address the impact of the social media giant which is to sell Giphy to an approved buyer. Stuart McIntosh, who chaired the independent inquiry group which carried out the CMA’s latest investigation, said: “This deal would significantly reduce competition in two markets.
He adds, “It has already resulted in the removal of a potential challenger in the UK display ad market, while also giving Meta the ability to further increase its substantial market power in social media.
“The only way this can be addressed is by the sale of Giphy. This will promote innovation in digital advertising. Also, ensure UK social media users continue to benefit from access to Giphy.”