Categories: Tech

The union between Meta and Giphy is still opposed by the UK government

Il Competition Appeal Tribunal (CAT) formally agreed with the British antitrust: Meta’s acquisition of Giphy would damage the competitiveness of the sector, so Big Tech has to turn around. Or at least it should, however a possible loophole immediately emerged.

Meta and Giphy, a complicated relationship since the days of Facebook

It was back in 2020 when the then Facebook had placed Giphy, a company specializing in the production and dissemination of animated gifs, in its sights. The social giant quickly took steps to buy the tech firm for $ 400 million, however the UK government intervened to prevent the two realities from being completely merged.

In November 2021, moved by the fear that the powerful social network would obtain a monopoly on the universe of animated images, the Competition Markets Authority (CMA) ordered Giphy to be sold as soon as possible. Meta appealed to the decision, relying on six different reasons, however almost all comments were rejected. All but one and even that has not been fully accepted, yet that detail that has been recognized can now turn the situation upside down.

Protest demonstration in November 2021 held in front of the London Houses of Parliament.

letter sings

Referring to the documents published by the CAT, the only objection that has been accepted relies on a bureaucratic technicality and is the one made in the second element of the fourth motivation. It was shown that in August 2021 the CMA had learned that the social Snap, not equipped with the economic resources to steal Giphy from Meta, had decided to get your hands on Gfycata company in turn dedicated to producing GIFs.

The British antitrust considered this information as confidential and did not mention it in the debate it had with Facebook’s lawyers. Here, then, that the Big Tech points out that, having known it in time, the defense could have started a better articulated discourse for demonstrate that the ecosystem of animated images is, after all, still respectful of the free market.

The future of Meta and Giphy still seems far from an epilogue

While acknowledging that part of the process has fallen victim to a formal defect, the CAT did not want to comment on what to do. «We invite the parties to consider what the consequent moves should be and – more specifically – to establish how and when the question of referral can be determined. We believe it is better to solve these needs sooner rather than later », the government agency decreed.

A compromise must therefore be found between the concerns of the United Kingdom and the expansionist visions of the social network. Considering that Meta is still convinced that it wants to proceed with the absorption, such a meeting point seems extremely unlikely. What will happen then? If a compromise is not found, it is easy to believe that Meta’s lawyers will aim at turning the clock back two years, proposing to start the legal process all over again.

Beyond any possibility of victory, the maneuver would allow the company to gain time, postponing for a few years the execution of what is imposed by law, or the sale of Giphy. Despite the apparently eccentric premises, the question raised by the Competition Markets Authority is not to be taken lightly. The antitrust in fact fears that Meta could exploit its strengthened position for the purposes of even more widespread and invasive advertising efforts or, even more worryingly, that it decides to exploit the GIF library for gather information about competitors’ customers.

Published by
Walker Ronnie

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