Meta has agreed to sell its animated image service Giphy to digital image company Shutterstock for $53 million, incurring a loss of over $260 million. The sale comes as a result of the UK’s Competition and Markets Authority (CMA) issuing a final ruling, which deemed Meta’s acquisition of Giphy anti-competitive and required its divestment.
The CMA’s decision was based on concerns that Meta’s ownership of Giphy could stifle competition and strengthen its monopoly in the social networking and online advertising sectors. The final ruling, handed down in October 2022, noted that Meta’s control of Giphy could limit access for rival companies like Twitter and Snapchat and potentially force them to share more user data with Meta.
In response to the CMA’s ruling, Meta was given a six-month deadline to find a suitable buyer for Giphy, ensuring the animated image service would continue to operate as a search engine. Meta finalized the sale agreement with Shutterstock just before the deadline. As part of the deal, Meta also inked a commercial agreement with Shutterstock to maintain access to Giphy’s animated image content across various platforms and social networks.
The UK has stringent regulations regarding acquisitions by major tech companies. In another case, the CMA has objected to Microsoft’s $69 billion acquisition of gaming company Activision, though the decision is currently being appealed by both parties involved in the transaction.
