Judge orders Meta to sell Giphy

A UK judge has ordered Meta to unwind its purchase of Giphy, marking the first time a Big Tech takeover has been forcibly undone by competition regulators. The order to sell Giphy comes after the Competition and Markets Authority (CMA) ruled that the deal was anti-competitive. Meta announced the $400m acquisition in May 2020. It completed the deal in May 2021, and was fined for failing to comply with the CMA’s investigation. The CMA said that Meta would be forced to sell Giphy because the deal removed a potential competitor in social media and digital advertising. At the time the deal was completed, Meta was told it could either sell Giphy, or sell either Facebook or Instagram. The CMA said Giphy was a potential competitor to Meta in display advertising, an area in which the company was looking to expand. By buying Giphy, Meta had removed a “nascent” rival in the space, the CMA said. Meta said it was disappointed by the decision and indicated that it planned to appeal. The company argued that the CMA’s decision did not accurately reflect Giphy’s role in the digital advertising market. The decision marks the first time a Big Tech acquisition has been forcibly undone. The CMA has experience unwinding smaller deals, and is currently in the process of forcing Microsoft to sell Activision Blizzard’s cloud gaming arm before its acquisition of the business. In December, the EU similarly ordered Illumina to unwind its purchase of cancer test maker Grail. Meta was also forced to sell its Diem digital currency project to bank Silvergate Capital, and was forced to unwind its purchase of VR developer Within. The FTC also sued to undo Meta's purchase of VR developer Within Unlimited and fitness app maker Supernatural. All three were purchased by Meta while Mark Zuckerberg was CEO without first getting regulatory approval. The decision also marks yet another blow to the tech giant as it lays off thousands of employees and shifts its focus to generative AI.