facebook meta logos reuters 1639977088331

UK regulator opposes CMA’s order to sell meta Giphy, accusing it of withholding information

Facebook owner Meta on Monday launched its appeal against Britain’s decision to sell Giphy, arguing that it offered too little to buy rival Snap’s animated-image provider, weakening the rationale used to block the deal.

The British Competition and Markets Authority (CMA) ordered Meta to sell Giffy, which it bought in 2020 last year.

Giphy’s new ads or “payment arrangement” business are likely to change significantly, the deal said, eliminating potential competitors in display ads.

The deal claims that Facebook, Instagram and WhatsApp can restrict competitors’ access to the GIFs.

Ruling – the first block of large digital acquisitions by a British regulator – marked a phase change in the scrutiny of “Big Tech”.

On the first day of the four – day hearing at the Competition Appeals Tribunal, Meta’s lawyer Daniel Joel said that Meta’s rival had made an unofficial offer to buy Snap Giphy, with the CMA withholding its value internally for $ 142 million (approximately) for 14 months. Rs. 1,100 crores).

That is less than half of the $ 315 million (approximately Rs. 2,400 crore) offered by Meta.

He said he believes Giphy’s advertising business has no real potential, as Snap’s low valuation meta.

Joel said CMA did not ask Snap if Giphy’s advertising business had any value – there was a procedural failure in itself, but it was clear that “Snap was not motivated to buy Giphy”.

Sfic then acquired Gficat, a competitor to Giphy.

Joel says Giphy’s revenue in the United States is less than 0.05% of meta’s advertising revenue – “literally minus” – that Giphy has never sold ads in the UK or anywhere else.

A META spokesman said the deal was made public on Monday in support of its claim that it had encouraged competition and improved selection.

“The decision to block the deal is wrong on the law and the facts, and the evidence does not support the CMA’s conclusions or resolution,” the spokesman said.

The CMA said it would “vigorously” justify its decision.

“The merger combines Giphy’s position as a leading provider of free GIFs and GIF stickers in the UK, as well as meta’s significant market power on display advertising and social media,” a spokesman said.

“By asking Meta to sell Giphy, we promote competition and innovation in digital advertising, and ensure that rival social media providers gain competitive access to Giphy services for the benefit of UK consumers.”

© Thomson Reuters 2022

Leave a Comment

Your email address will not be published.