Facebook’s Meta accepts UK order to sell GIF search engine Giphy just 2 years after acquiring the startup for $315 million
Facebook parent company Meta finally admits defeat after many months of antitrust battle that led Britain’s competition regulator to block the $400 Giphy deal. The UK Competition and Markets Authority (CMA) issued its final verdict on Tuesday ordering Meta to sell its animated image-making unit Giphy.
A Meta spokesperson said the company was “disappointed by the CMA’s decision but accept today’s ruling as the final word on the matter.” The company said it would accept the 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.”
Britain’s competition regulator blocked the Giphy deal in November 2021 on concerns that Meta could deny or stifle other competitors such as Snapchat and Twitter access to Giphy’s GIFs.
But in an August court filing, Giphy tried to downplay the significance of Meta’s takeover of the company saying that its core product offering was going out of fashion, so there’d be no other company willing to buy it.
GIFs “have fallen out of fashion as a content form, with younger users, in particular, describing gifs as ‘for boomers’ and ‘cringe,’” the company said in the filing. Giphy also added that it has seen a noticeable decline in the number of GIF uploads in the past two years.
We first covered the story of the acquisition two years ago when the then-Facebook bought the GIF search engine startup Giphy for around $315 million.
The Giphy deal was hardly one of Meta’s biggest. The social giant had spent far greater sums on past deals, including the $1 billion acquisition of photo-sharing app Instagram and the $19 billion buyout of encrypted messaging platform WhatsApp.
The deal was a strategic acquisition for Meta. At the time, the company was planning to integrate Giphy into the Instagram app “so that people can find just the right way to express themselves.” But Meta later said Giphy would continue to operate its library
Founded in 2013 by Alex Chung and Jace Cooke, Giphy is a library of GIFs that can integrate with other apps. Companies like Slack and Twitter have built Giphy into their apps. Apple also uses some Giphy images for its GIF feature in iMessage. It’s unclear if Facebook will end those relationships to keep Giphy only on Facebook’s apps. Instagram said in a tweet that third parties will still be allowed to use Giphy images.