The UK is reportedly set to block Facebook parent Meta Platforms’ $315 million purchase of Giphy, the popular animated GIF maker.
The clampdown, which comes after the UK’s Competition and Markets Authority began investigating the acquisition in June 2020, could mark the first time ever that the British government has moved aggressively to regulate Big Tech firms.
The authority has told Meta — which changed its name from Facebook last month, and which also owns Instagram and WhatsApp — that it has until Dec. 1 to divest itself from Giphy, whose acquisition it completed in May 2020, the Financial Times reported Monday.
In October, the UK regulator fined Meta more than $67.2 million for a “major breach” of an order to remain separate from Giphy during its investigation. CMA accused Meta of “consciously refusing to report” information about the merger. The fine was the largest ever handed down by the agency.
Specifically, the CMA has raised concerns that Meta’s purchase of Giphy would deny competitors access to GIFs. It likewise claimed that users from rival platforms like TikTok or Snapchat would be forced to hand over data to Meta in order to use GIFs.
As the British regulator put it, the merger would lead to a “substantial lessening of competition in social media and display advertising, harming social media users and business in the UK.”
The agency also argued that the acquisition prevents Giphy from expanding its paid advertising service in the UK. Giphy has denied this.
Meta didn’t immediately respond to a request for comment from The Post.
In August, after the CMA released its provisional findings of its investigation into the merger, Meta accused the agency of “engaging in extraterritorial over-reach” and “sending a chilling message to start-up entrepreneurs: Do not build new companies because you will not be able to sell them.”
Meta also claimed that absent the merger, Giphy would have “continued in a diminished and underfunded state.”
The UK clampdown comes on the heels of the Biden administration’s lawsuit from August that accuses Meta of being a monopoly that illegally stymied competition. In particular, the Federal Trade Commission accused Meta of creating a “moat” around its monopoly through its acquisitions of Instagram and WhatsApp.
“After failing to compete with new innovators, Facebook illegally bought or buried them when their popularity became an existential threat,” Holly Vedova, acting head of the FTC’s competition bureau, said in a statement from August.
The FTC filed an amended complaint against the firm just weeks after a judge threw out its original case in June. The judge had accused federal regulators of failing to provide enough evidence that Facebook created a monopoly in the social networking space.
Facebook has denied the FTC’s allegations. “There was no valid claim that Facebook was a monopolist — and that has not changed. Our acquisitions of Instagram and WhatsApp were reviewed and cleared many years ago, and our platform policies were lawful.”
President Biden’s pick to head the FTC, Lina Khan, has vowed to take a more aggressive stance against Big Tech giants like Meta, Google, Amazon and Apple.
Last month, whistleblower Frances Haugen came forward and alleged that Meta executives knew their products were causing harm to young teens yet ignored engineers’ warnings to curtail access for fear of hurting profits. Meta has denied the allegations.