Sina Technology News December 24, Beijing time morning news, according to reports, the British government antitrust agency has recently ruled that the US social network giant Meta (Facebook parent company) must sell the previously acquired GIF platform company Giphy. Meta recently filed a complaint, stating that the evidence from the regulatory agency does not support the conclusion that the acquisition poses a threat to competitors and may affect market competition in the online advertising industry.
In May 2020, Meta spent US$400 million to acquire Giphy, but last month, the British antitrust agency “Competitive Markets Agency” ordered Meta to sell the company on the grounds that some of the acquisition remedies proposed by Meta could not solve the relevant market of the British government. Monopoly concerns.
This is the first time in the history of the UK Competitive Markets Agency that it has blocked a large-scale M&A transaction in the Internet industry. This also shows a signal that the British government has changed its attitude in regulating large-scale technology companies.
In this regard, a Meta spokesperson said today that the company has filed a complaint against the decision of the Competition Market Bureau and will seek to completely abolish the order to sell the company.
The spokesperson said that whether it is legal or factual, the UK is wrong to block the acquisition transaction, and the relevant evidence does not support the conclusions or measures of the UK Competition Market Authority.
According to reports, Giphy’s platform has a large number of GIFs, and half of the traffic comes from the three established social tools under Meta’s company, namely Facebook, Instagram and WhatsApp.
In addition, the company’s GIFs are also extremely popular on other social platforms, including the short video platform TikTok, Twitter, and the instant-burning chat tool Snapchat. The UK Competitive Markets Authority is concerned that after Meta’s acquisition of Giphy, it may prevent social network competitors from accessing GIF resources or force their opponents to provide more user data.
Meta explained that after the completion of the acquisition, it will not change the content of the agreement for social platform opponents to access GIF resources, and will not collect more user data than in the past because of access to GIF. In fact, these animated pictures do not have functions or mechanisms for monitoring user behavior and habits like traditional cookies and other files.
In order to alleviate hidden worries, Meta proposed some legally binding remedies, which were rejected by the Competition Market Bureau because these measures would lead to continued monitoring of user behavior.
Another concern of the British government is that after the completion of the acquisition, Meta has closed the newly established online advertising business under Giphy, which is equivalent to eliminating potential competitors of Meta’s huge advertising business.
Meta said that Giphy’s online advertising business was not successful. In addition, if it becomes a market-leading player in the current business model, other animation providers in the industry will naturally copy Giphy’s business model. Therefore, this time the acquisition transaction did not meet the so-called “serious damage to market competition” conditions, which is an important basis for the British Competition Market Authority to veto the transaction.