United Kingdom orders Meta to sell Giphy subsidiary

United Kingdom orders Meta to sell Giphy subsidiary

Update 1 (11/30/2021 @ 15:40 ET): The UK’s Competition and Markets Authority (CMA) officially ordered Facebook owner Meta to sell Giphy today (via XDA Developers). The CMA said, “our assessment has shown that GIPHY has a number of distinctive qualities which mean that many social media platforms rely on it to facilitate user expression. we have only found one effective remedy – the full divestiture of Giphy.”

Meta can still appeal the CMA’s ruling, so it’s not quite a done deal yet. The article as published on November 29, 2021, is preserved below.

Meta, owners of Facebook, Instagram, and WhatsApp, revealed last year that it was buying Giphy. Giphy is one of the most popular GIF repositories on the web, and Meta quickly integrated Giphy into its Instagram team. However, the purchase could soon be reversed, thanks to the United Kingdom’s Competition and Markets Authority.

The Financial Times is reporting (via Engadget) that the United Kingdom’s Competition and Markets Authority will likely block Meta’s acquisition of Giphy “in the coming days,” which would be the first time the CMA has unwound a purchase from a Big Tech company. The United Kingdom originally opened an investigation into the purchase in June 2020, saying “this merger may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.”

The CMA’s previous reports argued Meta could cut off other social media platforms from using Giphy content, or force competitors like Snapchat or TikTok to provide more user data in exchange for access to Giphy.  Meta shut down Giphy’s own paid ad partnerships after the acquisition, which were only live in the United States, but the CMA argued that Giphy could have expanded its ad operations to the UK had the program not been shut down.

The Competition and Markets Authority has not yet made an official statement about blocking the deal. If the acquisition is reversed, Meta could be forced to sell of Giphy. Meta reportedly paid around $400 million for Giphy in 2020, and the platform has integrations with Instagram, Facebook, Samsung Keyboard, and dozens of other high-profile applications and services.

The Competition and Markets Authority is also investigating NVIDIA’s purchase of Arm, the U.K.-based semiconductor and software design company that develops the widely-used ARM architecture. That deal has not yet been completed, but the CMA could potentially block that merger due to its impact on the U.K.’s national security.

About author

Corbin Davenport
Corbin Davenport

Corbin is a tech journalist and software developer based in Raleigh, North Carolina. He's also the host of the Tech Tales podcast, which explores the history of the technology industry. Follow him on Twitter at @corbindavenport.