After a long legal battle, Meta, the parent company of Facebook and Instagram, has resigned itself to selling its subsidiary Giphy. In 2020, Meta had bought the platform for ultra-short, often funny videos (GIFs or gifs), which are widely shared on social media and in chat messages, for 315 million dollars (currently 350 million euros).
The UK competition authority broadly confirmed an earlier ruling on Tuesday that both the advertising and social media markets would be disrupted if Giphy remains in the hands of Meta. For example, Meta could make it more difficult for other media platforms to use GIFs, “and thus make those sites less attractive and thus competitive”.
Meta says she is disappointed, but will sell Giphy. In doing so, the American tech company recognizes that it cannot ignore statements from competition authorities outside the US. The British Competition and Markets Authority (CAM), like the European Commission, uses the size of the (British) home market to enforce compliance with its own rules at the large American tech companies.
Also read: The GIF, pacesetter of the internet
For years there has been a lot of criticism of the practice of these tech giants to buy up and incorporate smaller innovative companies that can become competitors. Meta did that (then under the name Facebook) with Instagram in 2012 and WhatsApp in 2014. Never before has Meta been forced to sell a business unit.