When Meta bought the world’s largest search engine for GIFs, they promised them very happily. Now, Zuckerberg’s monopoly has received a severe setback in court, where they have not allowed the purchase to go ahead.
Target, formerly known as Facebook, it will have to ditch its big 2020 purchase. The UK’s Competition and Markets Authority (CMA) has ordered Zuckerberg to sell Giphy after he lost his battle in the Competition Court of Appeal.
Although the CMA reviewed the decision in July after the court sided with Meta on one issue, it felt the deal could still harm competition by limiting rivals’ access to Giphy’s GIFs, i.e. by an antitrust issue.
Facebook bought Giphy in May 2020 for an unofficially estimated price of $400 million. The company hoped that the purchase would improve the search for GIFs and stickers in the Stories and direct messages of Instagram.
Although the firm maintained that Giphy would be “openly available” for other applications, the CMA launched an investigation a month later and determined in August of that year that the purchase would hurt competition in social media and advertising.
Meta rejected those claims and appealed the November 2021 order to sell Giphy, arguing that the improvements would ultimately offer “more choice for everyone.”
Facebook will collaborate and sell Giphy
A Meta spokesman told Engadget that the company was “disappointed” with the CMA’s decision, but that he would respect the result and cooperate in the sale of Giphy. The social network operator added that he would still consider acquisitions to offer more “innovation and choice.”
The failure of the Giphy deal will not necessarily hurt Meta’s business. However, it comes as authorities re-examine the company’s purchases of Instagram and WhatsApp.
Meta’s habit of acquiring companies is under close scrutiny, and Giphy’s deal change won’t ease the pressure. It is the duty of the authorities to work so that monopolies do not arise, something very difficult when there are companies that have more power than some governments.