British authorities are forcing Facebook to sell Giphy, the famous GIF (animated image) company that Facebook bought two years ago for $400 million. This is the first time Meta has been forced to sell the company as it faces competition from social media and display advertising.
The UK’s CMA (Competition and Markets Authority) said the only way to resolve the Meta dispute was to sell Giphy.
The body asked Facebook to sell Giphy back in 2021, the American giant filed an appeal, but lost there as well. Meta has now said it will comply and sell Giphy, and the sale will have a global effect, not just in the UK.
The CMA said it was most worrying that Facebook ended Giphy’s advertising services after the takeover, even though the plan was to expand them. This affected competition in two markets: display advertising (where Facebook lost a competitor) and social networks (where the company already had a lot of power).
The regulatory authorities of several large countries have turned their attention to the giants of Silicon Valley and their strategy of buying small companies that could potentially become the main competitors in various segments. Tech giants influence market competition by buying potential future competitors.
Sources: Guardian, CNBC
Photo source: Dreamstime.com
Source: Hot News RO
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