The UK's Competition and Markets Authority (CMA) is expected to reverse Facebook parent company Meta's purchase of Giphy in the coming days, according to the Financial Times. If so, it would mark the first time that the country's competition regulator has unwound a major tech acquisition.
Meta (or Facebook, at the time) announced in May 2020 that it bought the GIF platform with the goal of rolling it into Instagram. Reports pegged the price of the deal at $400 million.
The CMA raised concerns about the acquisition, however. It opened an investigation into the deal the following month. The regulator ruled in August that the deal could prevent rivals such as TikTok and Snapchat from accessing Giphy's library of GIFs. It also said the deal could remove a potential competitor to Meta in the UK advertising sector. Meta ended Giphy's paid ad partnerships, which the CMA said halted the company's ad expansion, including to other countries.
The watchdog suggested Meta could be forced to sell the service. A CMA spokesperson told Engadget that it hasn't published it's final decision, but it has until December 1st to do so.
Meta has previously argued that because Giphy doesn't have any operations in the UK, the CMA has no jurisdiction in this case. In addition, it claimed Giphy's paid services couldn't be classed as display advertising according to the CMA's market definition.
The issue between Meta and the CMA grew more contentious in October, when the authority fined the company almost $70 million for breaking rules related to the deal. The CMA said it was the first time it determined a company breached one of its orders by "consciously refusing to report all the required information."
Engadget has contacted Meta for comment.