Meta Platforms says it will sell the GIF generator Giphy following an order from the U.K.’s Competition and Markets Authority Tuesday (Oct. 18).
According to a CMA news release, the authority “has found that Meta’s takeover of Giphy could allow Meta to limit other social media platforms’ access to GIFs, making those sites less attractive to users and less competitive.”
The authority also found that the $400 million deal took Giphy out of the running as a potential challenger in the British display advertising market, which would keep U.K. businesses from benefiting from innovation in that sector.
Learn more: UK’s CMA Demands That Meta Sell Giphy
According to published reports, Meta says it will accept the CMA ruling as final and work with the authority on divesting Giphy.
The CMA first expressed concern about the Meta (then still calling itself Facebook) purchase of Giphy in August of 2021. The decision marked the first time a global regulator had tried to force a Big Tech firm to walk back a finished deal.
“Millions of posts every day on social media sites now include a GIF,” the CMA said at the time. “Any reduction in the choice or quality of these GIFs could significantly affect how people use these sites and whether or not they switch to a different platform, such as Facebook.”
In November of last year, that concern became a demand, with the CMA ordering the social media giant to sell Giphy. Meta appealed the ruling in June and enjoyed a short-lived victory, only to have the tribunal send the case back to the CMA the following month.
Read more: UK Court Sends Meta Giphy Case Back to Antitrust Watchdog
As PYMNTS reported in July, Britain’s Competition Appeal Tribunal (CAT) largely backed the CMA’s decision to make Meta sell Giphy, but found that the CMA failed to properly inform Meta of Snapchat’s acquisition of Gfyca, information that could have bolstered Meta’s case.
However, the CMA said Tuesday that it had spent the last three months examining third-party evidence and submissions from Meta and Giphy and found that the deal would allow Meta to “increase its already significant market power” by denying or limiting other platform’s access to Giphy’s GIFs, thus shifting users to Meta-owned sites.
These sites — Facebook, Instagram, WhatsApp — already account for nearly three-quarters of the social media time spent by users in the U.K., the CMA said.
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