UK Competition Watchdog Blocks Giphy Acquisition Deal
According to an insider report, Facebook’s takeover of Giphy has failed. The British competition regulator CMA had leaked a few weeks ago that it was opposed to the deal – the official ban is due to be announced today.
This is what the Financial Times and the Reuters news agency report. Accordingly, an insider familiar with the examination of the takeover has given them the information in advance that the competition regulator CMA will forbid the takeover by the newly formed meta-group. This became apparent weeks ago, although it must be said that takeover bans according to antitrust investigations are still quite rare.
Facebook would buy the “ruler of the GIFs”, the service Giphy, for around 400 million US dollars. Which was already in 2020 known. The fact that the takeover has not yet been carried out (or canceled) makes it clear that there was no consensus among competition regulators for a long time.
According to a preliminary report by the CMA, the popular GIF search engine Giphy should remain independent and should not be allowed to join forces with the social media giant Meta (back then only known as “Facebook”).
The rationale for blocking the Giphy deal by the CMA, which was released back in the summer, was as follows: “Every day, millions of posts on social media pages now contain a GIF. A reduction in the selection or quality of these GIFs could have a significant impact on how people use these sites and whether or not they switch to another platform like Facebook, as most of the major social media sites that compete with Facebook use Giphy GIFs and it just another big one There are providers of GIFs – Google’s tenor – these platforms hardly have a choice. “
Advertising Market Concern
There are also similar concerns about the restriction of the advertising market. Reuters now says the CMA sees the purchase as a “killer takeover” aimed at eliminating an emerging competitor. It is now eagerly awaited whether these media reports on the takeover ban come true and what specific reasons the competition watchdog is now giving.
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