Giphy, the popular animated image service, might have taken the crown for being the most self-deprecating company ever.
Before UK competition regulators ordered Meta to sell Giphy on Tuesday after finding the two companies were suppressing competition, the GIF search engine tried to quell fears by claiming that GIFs were now “out of fashion”, “cringe” and “for boomers”.
It is the first-ever time a global regulator has ordered a Big Tech company to undo a completed deal – showing the Competition and Market Authority’s (CMA) seriousness about wanting to be a fierce force in stamping down tech giants.
The CMA noted the risk of Meta’s ownership of Giphy suppressing competition in the social media and display advertising market.
The watchdog said that Meta must “sell GIPHY, in its entirety, to a suitable buyer.” It is currently unclear which company will be stepping up.
Meta was first ordered to sell Giphy by the CMA back in November. Zuckerberg’s company appealed the decision but was fiercely kicked back in June after a court wholly ruled against the appeal.
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The CMA ran another three-month review and decided that Meta owning Giphy would allow it to grow its market power further, CNBC reported.
Black day for Big Tech
Meta complying with the order to sell Giphy is not only a setback for the social media giant, but analysts believe it sends a strong message to other tech titans too
“It’s a big setback for Meta, and it sends a strong message to Big Tech that regulators are watching their M&A activity closely and will stop and unwind a deal whenever they believe it will reduce competition,” Laura Petrone, thematic analyst at GlobalData, told Verdict.
Petrone believes that the scrutiny Meta’s merger and acquisition activity “will convince the company to look for acquisitions outside the social media space” as this is where it finds itself in the regulator’s crosshairs.
“This one of the reasons why Meta has been trying to move into other sectors, such as online payments, taking advantage of its scale and using the data generated from social media and advertising,” Petrone added.
The news comes as politicians, like US senator Elizabeth Warren, have doubled down on their calls to break up Big Tech firms.
Giphy was bought by Meta for $315m, making it one of the smaller purchases of the social media giant when put alongside earlier deals like the $19bn purchase of WhatsApp.
Don’t worry about Meta owning us, Giphy says, GIFS are “cringe” now
During the back and forth in court, Giphy attempted to underplay Meta’s purchasing of the company by savagely claiming their own product was “cringe” and “for boomers”. The self-deprecating company claimed there’d be no other company willing to buy it.
The company added that GIFs have “fallen out of fashion as a content form” and that the company has seen a decline in the number of GIF uploads in the past two years.
Despite absolutely savaging the whole product of their company, the CMA had serious issues with the takeover and how it could impact the UK display advertising market.
Meta currently controls almost half of the UK’s $7bn display advertising market – keeping it fiercely in the crosshairs of the CMA.
“Regulators increasingly view Big Tech companies as digital monopolies, no matter the sector in which they operate,” Petrone told Verdict, “this is especially true of large social media companies like Meta, which could easily become monopolies due to network effects.”
GlobalData is the parent company of Verdict and its sister publications.