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Meta may have to sell Giphy after all, but there could be some hope

Meta and its brands
(Image credit: Alex Dobie / Android Central)

What you need to know

  • Meta purchased Giphy in 2020 for $400 million.
  • The U.K.'s Competition and Markets Authority (CMA) found that the deal would harm competition and ordered Meta to sell the GIF platform.
  • Meta appealed the decision, but it was found that the CMA acted fairly in its decision on all counte but one.

It looks like Meta's acquisition of Giphy will be a fairly short-lived one after the company largely failed to appeal a decision by the Competition and Markets Authority (CMA) to sell the platform. The decision came on Tuesday, which found that the CMA was mostly justified in its ruling.

In 2020, Meta announced that it would acquire Giphy for $400 million, integrating the platform into its various apps and services. However, the CMA has maintained that it would harm competition if Meta controlled one of the few major GIF platforms. In 2021, the CMA ordered Meta to divest Giphy, a decision that Meta tried and seemingly failed to appeal.

However, the ruling seems to leave a little wiggle room for Meta, as the Competition Appeal Tribunal (CAT) decided that the CMA withheld information crucial to Meta's case. More specifically, the fact that Snapchat's parent company, Snap, had purchased a competing GIF platform, Gfycat, that same year. This is information that the CMA apparently sat on for more than a year before informing Meta last August, which the tribunal notes "undermines the entirety of the Decision."

"We stress that we make absolutely no decision in this regard, because we consider that we need to hear further from the parties on the consequences of the procedural failure that we have identified and, in particular, on the question as to whether that failure obliges us to remit the Decision to the CMA for fresh consideration."

In a statement to Android Central, Meta echoed the tribunal's sentiments that the CMA's approach to the case was "difficult to defend."

"We look forward to understanding how these serious process flaws will be addressed. We firmly believe our investment would enhance GIPHY's product for the millions of people, businesses, and partners who use it."

It seems all but set that Meta will have to divest Giphy. However, there seems to be a small chance that the CMA's decision to redact information from Meta could turn things around or ultimately delay the inevitable.

Derrek is a long-time Nokia and LG fanboy who loves astronomy, videography, and sci-fi movies. When he's not working, he's most likely working out or smoldering at the camera.