Facebook in UK court to defend Giphy takeover

Posted 25 April, 2022

Meta, the parent company of Facebook, was in court on Monday to try to overturn a decision of the British competition policeman (CMA) which asked it to abandon its merger with the specialist in short animations on the internet Giphy.

Meta is appealing in a four-day trial before the London Competition Appeal Court. The decision will not necessarily be rendered at the end of the hearing and could also be subject to appeal.

The CMA had estimated in November that this acquisition in May 2020 for 315 million dollars and shares of Facebook risked harming online advertisers as well as users and had asked the giant of social networks to sell Giphy.

After an in-depth investigation that spanned nine months and led the CMA to review more than 280,000 internal Meta and Giphy documents, the regulator said it feared the acquisition would further the already dominant market position. of Facebook in online advertising and compared to other social networks.

"This merger combined the significant market power of Meta (...) with the position of Giphy as the main supplier" of Gif in the United Kingdom, the CMA said Monday in a statement sent to AFP.

"By requiring Meta to sell Giphy, we are encouraging competition and innovation in digital advertising and ensuring that rival social networks can gain competitive access to Giphy's services," she added.

Meta argued Monday morning that the British regulator has not demonstrated the competition concerns invoked, saying in a statement that "the decision to block the agreement (to purchase Giphy) was wrong in law and in fact".

Despite numerous documents reviewed, the CMA "did not find a single one showing that Meta viewed Giphy as a threatening competitor" at the time of the merger in the online advertising market, argued attorney Daniel Jowell. at the hearing.

He also pointed out that the platform had not received any other firm purchase offer, which he said shows that its growth prospects were not necessarily anticipated as stellar.

For Meta, this acquisition was notably a way of integrating into Instagram, its photo and video sharing service, and the immense library of Giphy.

Founded in 2013 and based in New York, Giphy is one of the leading Gif sharing platforms, claiming over 700 million daily users.

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