The Daily Telegraph

Meta bows to regulator and reverses Giphy takeover

- By Gareth Corfield

META, parent company of Facebook and Instagram, has accepted the competitio­n regulator’s order to reverse its $400m (£353m) buyout of Giphy.

The Competitio­n and Markets Authority published its widely expected final decision yesterday, prompting Meta to say it accepted the ruling “as the final word on the matter”.

The move is the first time that the CMA has reversed a takeover by a socalled “big tech” company from the US.

Giphy is a website hosting animated images that users can embed in social media posts.

Its value to Facebook was in the generation of tracking data on its users, showing Giphy bosses what type of devices they were using and the websites on which they were posting gifs.

Giphy’s takeover by Meta was announced in 2020, shortly followed by the CMA’S investigat­ion.

The closely watched inquiry has been seen as a test of the regulator’s willingnes­s to intervene in the global tech markets as it flexes its muscles in the post-brexit era.

Meta had previously tried to halt the demerger by appealing to the courts. Assertions that the CMA had behaved “disproport­ionately”, “irrational­ly” and “unfairly” in blocking the buyout failed to impress judges, however, who ruled in the regulator’s favour on five of six disputed issues. The remaining one was a procedural point that did not affect the competitio­n authority’s decision to unwind the merger.

“The CMA found that Giphy’s advertisin­g services had the potential to compete with those of Meta, and would have encouraged greater innovation from Meta and other market players,” said the watchdog in a statement yesterday .

Meta controls “almost half ” of the UK’S £7bn digital display advertisin­g market, according to the competitio­n regulator. Almost three quarters of British social media users are said to spend time on Meta-owned apps, which include Facebook, Instagram and Whatsapp.

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