UK court halts Meta’s forced sale of Giphy
The dispute over the acquisition of Giphy by Meta is entering the next round. The exit seems open.
A UK judge has rejected the UK’s Competition and Markets Authority (CMA) request that Meta Platforms sell Giphy. The court found concerns about the cartel authority’s approach to the investigation.
This is reported by the business news agency Bloomberg. The ruling follows the CMA’s decision last year to block Facebook’s takeover of the gif database. Competition watchdogs fear such a takeover would harm social media users and advertisers.
The case will then return to the CMA for further consideration of the competitive impact. “We have agreed to reconsider our decision in light of this finding,” the regulator said in a statement. She intends to complete the review within three months. Appeals judges at the Competition Appeal Tribunal in June broadly supported the CMA’s decision to force Meta to sell Giphy, but also found that the regulator failed to properly consult certain aspects of its investigation and erroneously redacted material, undermining the decision.
Sign against Silicon Valley market power
The Giphy acquisition dispute has raged between CMA and Meta since the company was asked to reverse its $315 million acquisition of the GIF maker. Meta Platforms – then still known as Facebook, Inc. – had announced the planned takeover of the popular provider of animated images in May 2020 and was immediately met with resistance in Great Britain.
It was the first time a regulator has attempted to force a big tech to reverse a completed transaction, according to Bloomberg. This is “a sign of tough action by the supervisory authorities against the market power of the Silicon Valley giants”. At that time, the CMA temporarily prohibited Facebook from taking over Giphy’s business; both companies still have to work separately in the UK.
However, because Facebook refused to provide all information for the subsequent investigation, the CMA imposed a fine of almost 60 million euros at the end of October 2021 – the highest amount in its history. The authority assumed an intentional violation of its regulations. At the beginning of February, the British competition authority again imposed a fine of millions on Meta for procedural violations. So now the argument goes into overtime.
(akn)
