Meta Appeals UK Court Decision That Forced Them To Sell Giphy

Meta appeals the decision of the British court. (photo: doc. unsplash)

JAKARTA - Facebook's owner, Meta Platform Inc., began its appeal on Monday, April 25 against a UK court ruling that required them to sell Giphy. The reason for this is the fact that its rival Snap offers significantly less amount to buy an animated image provider. The offer from Meta was allegedly only to undermine and block the Giphy and Snap deal.

The UK Competition and Markets Authority (CMA) last year ordered Meta to sell Giphy, which it acquired in 2020.

They said the deal removed a potential competitor in display advertising. According to the court, this has made Meta too dominant and dominates the market. Yet in business, competition is substantial.

According to the court, the deal could also allow owners of Facebook, Instagram and Whatsapp to restrict competitors' access to GIFs.

The decision, the first block in a major digital acquisition by British regulators, signals a step change in "big technology" oversight.

On the first day of a four-day hearing at the Court of Competition Appeals, Meta attorney Daniel Jowell said the CMA had withheld for 14 months the fact that Meta's rival Snap had made an informal offer to buy Giphy, assessing it internally. of 142 million US dollars. The bid is less than half that offered by Meta, amounting to 315 million US dollars.

Snap's low valuation indicates that, like Meta, it believes that Giphy's advertising business has no real potential. Snap later acquired Gfycat, a competitor to Giphy.

Jowell said Giphy's revenue in the United States is less than 0.05% of Meta's ad revenue - "very small" - while Giphy doesn't sell ads in the UK or elsewhere.

A Meta spokesman said information published on Monday supported his argument that the deal promoted competition and increased choice.

"The decision to block the deal was wrong according to law and fact, and the evidence does not support the CMA's conclusions or remedies," the spokesperson said.

The CMA said it would defend its decision "with passion".

"This merger combines Meta's significant market power in display advertising and social media with Giphy's position as the UK's leading provider of free GIFs and GIF stickers," a spokesperson said.

"By requiring Meta to sell Giphy, we are promoting competition and innovation in digital advertising and ensuring rival social media providers can gain competitive access to Giphy services - to the benefit of British consumers."