Facebook appeals UK decision to sell Giphy

Meta, owner of Facebook, is appealing Britain’s decision to sell the animated image platform Giphy, saying the evidence does not support the conclusion that the deal is a threat to its rivals or could impact competition in the graphic advertising.

In November, the British Competition and Markets Authority (CMA) ordered Meta to sell Giphy, which it acquired for $400 million in May 2020, after deciding that the solutions offered by the US company did not responded to his concerns.

It was the first time the British regulator had blocked a major takeover in the industry and it signaled a sea change in its stance on big tech companies.

“We are appealing the CMA’s decision on Giphy and will seek the suspension of the divestment order,” a Meta spokesman said on Thursday (23).

Half of the traffic to Giphy’s massive image library comes from Meta platforms like Facebook, Instagram and WhatsApp. GIFs are also popular among TikTok, Twitter and Snapchat users, and the CMA was concerned that Meta would limit access or force rivals to provide more user data.

The company said it would not change competitors’ terms of access or collect additional data from the use of GIFs, which do not have online tracking mechanisms such as pixels or cookies.

CMA rejected the appeal, which Meta offered to make legally binding, in part because it would require ongoing monitoring.

The regulator also expressed concern that Meta could close Giphy’s fledgling advertising deal, removing a potential source of competition.

The company said that Giphy’s advertising business was unsuccessful and, if it had the potential to become a major competitor, its model could be replicated by any other GIF provider.