The CMA launched a probe into the case in 2021 and found that the deal might hurt the competition between platforms and affect UK advertisers. With its authority over Giphy, CMA believes Meta can limit other social media platforms’ access to GIFs and make them less attractive. Additionally, CMA found that deal has allowed Meta to remove Giphy from the display ad market. Meta appealed the decision, but the Competition Appeal Tribunal (CAT) confirmed that the deal had “reduced dynamic competition,” and Meta had no choice other than offloading the Giphy. The company currently has Facebook, WhatsApp, Instagram, and Oculus as its subsets.
Meta is forced to sell Giphy
According to Stuart McIntosh, chair of the CMA’s independent inquiry group, the Giphy deal allowed Meta to increase its substantial market power in social media. Also, Meta can force Giphy customers to give up UK users’ data in exchange for accessing the gif database. Currently, some big social media platforms like TikTok, Twitter, and Snapchat are using the Giphy database. “The only way this can be addressed is by the sale of Giphy. This will promote innovation in digital advertising, and also ensure UK social media users continue to benefit from access to Giphy.” McIntosh added. CMA rejected Meta’s first appeal, and the company has confirmed that it will follow the order and sell Giphy. “We are disappointed by the CMA’s decision but accept today’s ruling as the final word on the matter,” a Meta spokesman said. “We will work closely with the CMA on divesting Giphy.” Yet, we don’t know which company wants to buy the platform at what cost. But Giphy is the world’s largest gif database, and many companies want to own such a platform. However, according to the CMA’s ruling, Meta should sell Giphy to an approved buyer. So it’s unlikely that the next owner of Giphy will be a social platform like Twitter or TikTok.
