Meta has failed to overturn a decision by the Competition and Markets Authority (CMA) to block its acquisition of Giphy — but the regulator may have to revisit the case
Facebook’s parent company looked to acquire the services of social media gif provider Giphy to the tune of $315m, but was penalised by the CMA amidst anti-competition allegations last year, reported the Financial Times.
The CMA concluded that such a deal would substantially disparage competition in the social media market, and rule out Giphy as a potential advertising market challenger in the UK.
This decision proved to be the first case of the CMA blocking a move made by a big tech corporation.
All but one of the six grounds for appeal argued by Meta were dismissed by the Competition Appeal Tribunal — the regulator withheld the fact that rival Snap had acquired fellow gif provider Gfycat until August last year — meaning that the CMA may have to take another look at the case.
Giphy had previously allowed US-based organisations to promote their brands using its platform, an offering that the CMA said could be expanded globally.
While the tribunal stated “no hesitation” in ruling the CMA’s verdict as lawful, it commented that Meta’s narrow success “undermines the entirety of the [CMA] decision”.
Meta said the ruling found that the “CMA’s approach to its investigation was ‘difficult to defend’ and ‘undermines the entirety of the decision’,” before adding that “we look forward to understanding how these serious process flaws will be addressed.
“We firmly believe our investment would enhance Giphy’s product for the millions of people, businesses, and partners who use it.”
Reacting to the development, CMA chief executive Andrea Coscelli said: “We welcome this resounding endorsement by the Competition Appeal Tribunal of the CMA’s approach to reviewing mergers that may harm innovation.”
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