British Competition Regulator Asks Meta to Sell Giphy

The British regulator has blocked the acquisition of Giphy and has now advised the social media giant to sell the company.

CMA Blocks Giphy’s Acquisition

The United Kingdom’s Competition and Markets Authority has told Meta, Facebook’s parent company, to sell GIF-sharing platform Giphy. According to the regulatory agency, Meta’s acquisition of the company could harm social media users and advertisers in the United Kingdom.

However, Meta said it disagrees with the assessment and is currently considering an appeal of the decision. Per the regulator, Meta’s acquisition of Giphy would reduce the competition between social media platforms. Furthermore, it added that the deal had eliminated Giphy as a potential big player in the display advert market.

A panel from the Competition and Markets Authority said Giphy’s acquisition would give Meta more market power compared to other social media platforms. The other social media platforms would no longer have access to Giphy once the Meta acquisition is over.

The regulator said Meta-owned sites; Facebook, WhatsApp and Instagram, already control over 70% of the social media time in the United Kingdom and acquiring Giphy will allow Meta to send more traffic to its platforms.

CMA Wants Tougher Competition

The Competition and Markets Authority said it is blocking the deal to ensure that there is more competition in the market. Per the regulator, Giphy’s ad services would have been able to compete with Meta’s display advertising services.

Facebook rebranded to Meta a few weeks ago as it shows its desire to become more than just a traditional social media platform. The company intends to enter big into the metaverse space over the coming years.

However, Meta’s stock price has underperformed since then. Over the past month, FB is down by more than 1%. The loss is significantly higher over the last three months as the share price is down by nearly 15% during that period.

Year-to-date, FB remains one of the best-performing social media platforms, with its stock price up by roughly 19% so far.