Britain's Competition and Markets Authority (CMA) ordered
Meta to sell Giphy, which it acquired for a reported $400 million in May 2020,
last month after it decided the remedies offered by the US company did not
answer its concerns.
It was the first time the British regulator had blocked a
major digital acquisition, and it signalled a step change in its scrutiny of
"big tech" companies.
"We are appealing the CMA's Giphy decision and will
seek a stay of the CMA's order to divest," a Meta spokesperson said on
Thursday.
"The decision to block the deal is wrong on the law and
the facts, and the evidence does not support the CMA's conclusions or
remedy."
Half of traffic to Giphy's huge library of looping videos
comes from Meta's platforms Facebook, Instagram, and WhatsApp.
Its GIFs are also popular with users of TikTok, Twitter, and
Snapchat, and the CMA was concerned Meta could limit access or force rivals to
provide more user data.
Meta said it would not change the terms of access for
competitors, nor collect addition data from the use of GIFs, which have no
online tracking mechanisms such as pixels or cookies.
The CMA rejected the remedy, which Meta offered to make
legally binding, in part because it would require ongoing monitoring.
The regulator was also concerned Meta had closed down
Giphy's fledgling advertising business, removing a potential source of
competition.
Meta said Giphy's advertising business was unsuccessful, and
if it had the potential to become a major competitor its model could be
replicated by any other GIF provider.
It argues the deal did not, therefore, meet the threshold of
a "substantial lessoning of competition" needed for the CMA to block
it.
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