Meta Told to Go GIF Itself
Considering that Meta is arguably one of the most influential companies on the planet, for better or for worse, it’s a little surprising that it was allowed to purchase Instagram and WhatsApp with no issue. And it’s absolutely staggering that it just had its first confirmed roadblock as its purchase of Giphy fell through. Yes, you read that right, Meta was allowed to monopolize a huge chunk of social media and become a messaging mogul but GIFs are the line they shell not cross. Why? Let’s take a closer look.
How Much is Too Much?
Now, this is a longer story than you may think. The acquisition of Giphy began way back in May of 2020, when the deal was agreed between the two companies. The price was reportedly at $400 million, small change for Meta, especially considering that half of Giphy’s traffic came from Facebook and Meta was highly interested in the company. Meta reportedly planned to integrate Giphy directly into Instagram from the get-go, but trouble began brewing immediately. From people questioning what would happen to user data from Giphy when it fell into Meta’s hands to the chief issue that ultimately killed the whole deal: the UK’s Competition and Markets Authority (CMA) finding the deal to be anti-competitive. So that integration plan? Off the table, immediately. CMA ruled that Giphy could not be integrated into Facebook until the Authority issued a concrete ruling on the matter.
The First Decision
The CMA gave some preliminary conclusions in August of 2021, voicing concerns that Meta would either limit Giphy’s use for competitors or start harvesting extra user data. If you think that’s a bit harsh, remember that these are both things that Meta’s done before.
Then came November and the first ruling — the CMA stated that Meta had to divest Giphy, adding that Meta controlled too big of a share in UK’s advertising market. Meta, of course, tried to appeal and issued a statement about how well Facebook and Giphy went together. Nothing swayed CMA, though, with the only hitch coming in July 2022, when the owners of the best acronym ever — the Competition Appeal Tribunal — stated that the CMA would have to re-evaluate its decision due to some procedural issues.
The Final Decision
Now, October came and the CMA, unbothered, confirmed its previous ruling — Meta must sell Giphy. The CMA reiterated that Meta had a dangerous grip on the advertising market and that the purchase of Giphy would give it too much power. Meta has, at this point, begrudgingly agreed and will likely comply with the ruling.
Interestingly, though, Giphy itself is now unhappy with the result, as it says GIFs have fallen out of favor with the younger internet users and that there isn’t exactly a line of suitors waiting to snatch up the company. It’s hard to fault Giphy’s management, who have had a lucrative deal stolen from under their noses, but this hit to Meta’s empire is a major win for users and competitors alike.
