LONDON (Reuters) -Britain’s competition regulator ordered Facebook-owner Meta to sell animated-images platform Giphy on Tuesday after its view that the acquisition reduced innovation in the advertising market was upheld by a tribunal in the summer.
Meta said it would accept the Competition and Markets Authority’s (CMA) order to unwind the 2020 deal.
“We are disappointed by the CMA’s decision but accept today’s ruling as the final word on the matter,” a Meta spokesperson said in a statement. “We will work closely with the CMA on divesting Giphy.”
The British regulator blocked the deal, valued at a reported $400 million, in November 2021 on concerns that Meta could deny or limit competitors’ access to Giphy’s GIFs.
It was also worried about the loss of a potential competitor in display advertising, even though Giphy had no presence in the sector in Britain.
Meta appealed the ruling, but a tribunal upheld the CMA’s decision on five out of six grounds in June.
The CMA said it had considered new submissions from Meta and Giphy and additional evidence since the appeal, but had not changed its view.
“This deal would significantly reduce competition in two markets,” said Stuart McIntosh, chair of an independent inquiry group.
“It has already resulted in the removal of a potential challenger in the UK display ad market, while also giving Meta the ability to further increase its substantial market power in social media.”
“The only way this can be addressed is by the sale of Giphy,” he added.
(Reporting by Paul Sandle; editing by William James and Bernadette Baum)