Meta Forced to Sell Giphy by EU's Competition and Markets Authority

Facebook's rebrand to Meta wasn't all roses, and the giant tech conglomerate still has irons in a lot of battles. One of those battles seems to be coming to an end, and Meta is not stepping away as the winner. The fight in question is over whether or not Meta's ownership of Giphy flies in the face of antitrust regulations.

The Competition and Markets Authority reviewed the matter and has finally weighed in. According to its decision, Meta's ownership of Giphy hampers fair competition in the social media space.

The decision is a blow to Meta, though obviously Giphy isn't a huge part of the company's plans for the future. When then-Facebook purchased Giphy for $315 million in 2020, it did so with the intent to integrate Giphy with Instagram. That would have made it easier for Instagram users to find and share relevant gifs and could have led to options for sharing gifs on areas of the platform they currently don't work on.

The CMA's decision that Meta can't own Giphy may mean other social media companies can't own it either. The decision seems to be based on the fact that Giphy is a common resource that should be available across platforms and that ownership by one platform hampers competition. The problem here is that this outlook might limit which companies want to buy Giphy from Meta, resulting in a monetary loss on the deal.

Of course, Meta is big enough to absorb those potential losses. But it, and other tech companies, could face more pressure in the future now that this precedent has been set. Investors and users alike may want to watch the field for new activity as regulatory bodies take actions to dismantle what they perceive as digital monopolies.