UK orders Facebook to unwind 2020 Giphy deal as antitrust regulators seek to limit scale of Big Tech
- Europe is currently setting in place rules to restrict ‘killer acquisitions,’ where businesses buy a rival before it can become a threat
- Facebook, WhatsApp and Instagram already account for 73 per cent of user time spent on social media in the UK, according to the CMA
Few would have predicted that short video loops of Kanye West or cats furiously typing on laptops would be the final straw for competition regulators.
Yet on Tuesday, the UK ordered Meta’s Facebook to sell Giphy, the animated file search engine it bought for US$315 million in 2020, in part because the deal would attract even more users to Meta’s portfolio of products.
Giphy gives users access to millions of GIFs, video clips often used to communicate in the digital age.
The decision from the Competition and Markets Authority (CMA) is the first time a major global regulator has weighed in against a Silicon Valley giant and ordered it to unwind a deal after completion.
Regulators have rued lost opportunities to limit the scale of big tech firms. Europe is currently setting in place rules to restrict “killer acquisitions,” where businesses buy a rival before it can become a threat. Meta’s other deals like its purchase of Instagram are possibly more problematic than Giphy.
“I think it’s a sign of collective regret by the antitrust enforcement agencies around the world that that deal and other ones like it got through, so now what we’re seeing is a reversion to a sort of perhaps more extreme line of enforcement,” Richard Pepper, a lawyer at Macfarlanes in Brussels, said.