Giphy is one of the most popular GIF-sharing platforms on the internet, with the company reporting over 200 million active users monthly as of 2017. If you’ve ever tried to send a funny cat GIF to someone, there’s a chance that you used Giphy to do it. Meta noticed the vast number of people using Giphy and attempted to purchase the company, finalizing the sale in 2020 for $315 million. The acquisition quickly drew the attention of regulators from Britain’s Competition and Markets Authority (CMA), who said the transaction reduced “competition in social media and the display advertising market.” The regulators then ordered Meta to resell Giphy.
Giphy immediately appealed the CMA’s decision in November 2021. Surprisingly, company execs stated that Giphy had “no meaningful revenue-generating business” without Meta’s user base to monetize gifs. They also said that gifs were “out of fashion” and “cringe. Meta also argued on behalf of the merger, saying it believed the Giphy acquisition would give “more choices for everyone” and would not harm users or competition. The appeal continued for nearly a year, but the judge ultimately sided with the CMA. Today, the consumer watchdog ordered Meta to sell Giphy to prevent an anti-competitive monopoly. Meta accepted the ruling, even going so far as to confirm that the sale would apply worldwide, not just in the United Kingdom. It could be months or even years before Meta’s resale of Giphy is completed, but the British government does believe it will be great for both consumers and competitors alike. Meta now has to focus on another government showing its displeasure over a different buyout. The Federal Trade Commission recently sued Meta to block its acquisition of “Within,” the creators of a popular virtual reality fitness app. The FTC claims the attempt is “anti-competition,” just like Meta’s purchase of Giphy. The main difference between the two situations is that the FTC claims this attempted purchase may violate US laws regarding monopolies.
