Meta appealed during a four-day trial at the London Competition Appeal Tribunal. The decision will not necessarily be rendered at the end of the hearing and could also be subject to appeal.
The CMA had estimated in November that this acquisition in May 2020 for 315 million US dollars (402 million Canadian dollars) and that of Facebook shares risked harming the sale of online advertisements as well as users of the social network. She had therefore asked the social media giant to sell Giphy.
A months-long investigation
After an in-depth investigation that spanned nine months and led the CMA to review more than 280,000 internal Meta and Giphy documents, the regulator said it feared the acquisition would favor the position in the already dominant market of Facebook in online advertising and compared to other social networks.
This merger combined the significant market power of Meta […] with Giphy’s position as the main provider of GIF in the United Kingdom, said the CMA on Monday in a statement sent to Agence France-Presse (AFP).
By requiring Meta to sell Giphy, we encourage competition and innovation in digital advertising and ensure that rival social networks can gain competitive access to Giphy’s services.she added.
The giant fights back
Meta argued on Monday morning that the British regulator was unable to show the competition concerns invoked, saying in a statement that
the decision to block the deal (to buy Giphy) was wrong in law and in fact.
Despite the numerous documents examined, the CMA
couldn’t find a single one showing Meta viewed Giphy as a threatening competitor in the online advertising market at the time of the merger, attorney Daniel Jowell argued at the hearing.
He also pointed out that the platform had not received any other firm purchase offer, which he said shows that its growth prospects were not necessarily anticipated as stellar.
For Meta, this acquisition was in particular a way of integrating the immense library of Giphy into its social network Instagram.
Founded in 2013 and based in New York, Giphy is one of the leading GIF sharing platforms, claiming over 700 million daily users.