Facebook Parent Meta appeals in the UK that it has to sell Giphy

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Facebook owner Meta is appealing UK ruling to sell the Giphy animated picture platform, saying the evidence does not support a finding that the deal poses a threat to its competitors or competition in display advertising could affect.

The UK’s Competition and Markets Authority (CMA) ordered Meta to sell Giphy, which it acquired in May 2020 for a reported $ 400 million (approximately Rs.3005 billion) after ruling last month that it should be bought by the US – Companies offered remedial measures did not address their concerns.

It was the first time the UK regulator blocked a major digital takeover and this signaled a crucial shift in its scrutiny of “big tech” companies.

“We are appealing the Giphy decision of the CMA and will request a suspension of the CMA’s divestment order,” said a meta spokesman on Thursday.

“The decision to freeze the deal is wrong under the law and facts, and the evidence does not support the CMA’s conclusions or remedial action.”

Half of the traffic to Giphy’s huge library of looping videos comes from Meta’s platforms Facebook, Instagram, and WhatsApp.

Its GIFs are also popular with TikTok, Twitter, and Snapchat users, and the CMA feared that Meta could restrict access or force competitors to provide more user data.

Meta said it would neither change the terms of entry for competitors nor collect additional data from the use of GIFs that do not have online tracking mechanisms such as pixels or cookies.

The CMA rejected the appeal Meta wanted to make legally binding, in part because it would require constant monitoring.

The regulator was also concerned that Meta had shut down Giphy’s fledgling advertising business to eliminate a potential source of competition.

Meta said Giphy’s advertising business had been unsuccessful, and if it had the potential to become a major competitor, its model could be replicated by any other GIF provider. As a result, it argues that the transaction has not reached the “materially anti-competitive” threshold required for the CMA to block it.

© Thomson Reuters 2021

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