Meta’s acquisition of online gif generator platform Giphy is expected to be blocked by the UK’s competition watchdog, the Competition and Markets Authority (CMA).
The expected obstruction would be the first time the CMA has put a stop to a deal put forward by a Big Tech.
The CMA provisionally ruled that Meta should be forced to sell the online gif platform due to competition concerns in August.
The regulator has given itself a deadline of December 1 to make the final decision.
The CMA argued that Meta would be able to cut off rival company’s access to gifs, which are moving images lasting a couple of seconds.
It also claimed that Meta could demand rival platforms such as Snapchat and TikTok hand over more of their data to access gifs, which would further consolidate Meta’s position in the market.
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One of the other reasons the deal was blocked is because the CMA believed that the deal could remove one of the social media company’s display advertising rivals, despite Giphy having a small presence in the sector.
Currently, Meta controls 40 to 50 per cent of the UK’s display advertising market according to the regulator.
Mark Zuckerberg’s company, formerly known as Facebook, has fought to reverse the CMA’s decision, with the company expected to launch an appeal.
The company said the CMA was “engaging in extraterritorial over-reach” and “sending a chilling message to start-up entrepreneurs: do not build new companies because you will not be able to sell them”.
“We disagree with the CMA’s preliminary findings, which we do not believe to be supported by the evidence. As we have demonstrated, this merger is in the best interest of people and businesses in the UK — and around the world — who use Giphy and our services. We will continue to work with the CMA to address the misconception that the deal harms competition,” Meta said in August.