In a long-running dispute with British antitrust regulators, the social media giant Meta announced on Tuesday that it would sell Giphy, an online repository for video clips of facial expressions, pets, and other animated GIFs. This is a significant loss for Meta, which represents a major defeat for the social media giant.
It is the first time that authorities have required Meta, the firm that was once known as Facebook, to sell a portion of its business. The sale was imposed by Meta.
GIFs are often humorous and are shared as foolish responses in online chats — like the Rock raising his eyebrow — but the case is an illustration of the serious posture that antitrust officials across the globe are adopting against the largest digital corporations.
As a result of Meta’s $315 million acquisition of Giphy in the year 2020, the company now has one of the most significant centres for looping short-form videos, which are a prevalent form of online communication. However, British authorities said that the purchase will restrict competition in the social media and display advertising markets, both of which are dominated by Meta and were areas in which Giphy was only starting to develop before to the deal.
The Competition and Markets Authority of Britain issued the first decision requiring Meta to sell Giphy in the previous year; however, the ruling was challenged to a tribunal, which recently ruled in favour of the government. On Tuesday, Meta said that it will sell Giphy and would accept the decision made by the British government as “the last word on the subject.” According to Meta, the sale will take place all around the world and not only in Britain.
The frequent strategy in Silicon Valley of taking up smaller firms that have the potential to develop into large rivals is now being investigated by regulatory bodies located all over the globe. Meta is fighting allegations made by the Federal Trade Commission and numerous states in the United States that it purchased smaller competitors in order to eliminate competition. These allegations were made against Meta.
The Federal Trade Commission filed a lawsuit in July to prevent Meta from purchasing Within, the company that developed a well-known virtual reality workout programme called Supernatural.