The Competition and Markets Authority said Tuesday that it will order Meta to sell Giphy for the second time after the appeals court sent the decision back to the regulator for reconsideration. A spokesperson for Meta told The Verge that it will accept the ruling.
A spokesperson for Meta, Matthew Pollard, told The Verge: “We are disappointed by the CMA’s decision but accept today’s ruling as the final word on the matter. We will work closely with the CMA on divesting Giphy.” When asked if the divestment would apply to all of Giphy’s international operations, Pollard said: “Yes, this applies globally.”
The decision comes after the UK competition watchdog ordered Meta last year to settle the deal, following an in-depth investigation that found the link could dampen competition between social media platforms.
Describing the findings as “irrational”, Meta appealed to a London court. The transaction was sent back to the agency for a new review after the judges found concerns about the investigation process.
“This deal would significantly reduce competition in two markets,” Stuart McIntosh said in a statement. “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.”
Meta was ordered to sell the Giphy last year, but the company appealed the decision. Today, the UK Competition and Markets Authority (CMA) announced that Meta failed in five of the six appeals put forward in its appeal. The CMA said the acquisition should be reversed on the grounds that it ““could allow Meta to limit other social media platforms’ access to GIFs, making those sites less attractive to users and less competitive.”
Meta first announced the acquisition of Giphy back in May 2020.
The divestment order marks the first time a global regulator has forced a Big Tech firm to unwind a completed deal.