Meta is appealing a decision by the UK’s competition watchdog ordering it to sell online GIF generator Giphy, which it purchased for $400m in May 2020.
The Competitions and Markets Authority (CMA) ordered the tech giant to sell Giphy last month, the first time it has blocked a deal put forward by a Big Tech. Meta has now revealed it is appealing the decision.
“We are appealing the CMA’s Giphy decision and will seek a stay of the CMA’s order to divest,” a Meta spokesperson told Reuters.
“The decision to block the deal is wrong on the law and the facts, and the evidence does not support the CMA’s conclusions or remedy.”
The watchdog stated that the takeover allowed Meta to limit other platforms’ access to Giphy GIFs. This would drive traffic to Facebook-owned sites such as WhatsApp and Instagram, increasing Meta’s already-significant market power.
An independent panel concluded this would significantly reduce competition across both social media and display advertising. Meta-owned sites currently account for 73% of user time spent on social media in the UK and 40 to 50% of the UK’s display advertising market.
In an attempt to avoid the sale, Meta said it would not restrict competitor access or collect user data. The CMA rejected this and ordered the company to unwind the deal.