Meta’s appeal against the UK’s Competition and Markets Authority (CMA) over the blocked acquisition of Giphy has, for the most part, been rejected.
The Facebook owner attempted a takeover of Giphy in May 2020; however, the UK’s competition watchdog told the company to unwind the $315m acquisition due to competition concerns over dominance in online advertising.
A spokesperson for the CMA said of the merger that it “combined Meta’s significant market power in display advertising and social media with Giphy’s position as a leading provider of free GIFs and GIF stickers in the UK.”
The spokesperson added: “By requiring Meta to sell Giphy, we are promoting competition and innovation in digital advertising and ensuring rival social media providers can get competitive access to Giphy’s services – for the benefit of UK consumers.”
Meta began the appeal process earlier this year, arguing “the decision to block the deal” was “wrong on the law and the facts, and the evidence does not support the CMA’s conclusions or remedy”.
The Competition Appeal Tribunal (CAT) on Tuesday however, dismissed all but a single of Meta’s appeal claims.
The CAT ruled that the CMA had acted properly in its objection to the deal, with a single exception that may keep Meta’s side of the fight alive.
The tribunal agreed with Meta on the grounds that the CMA had withheld information regarding the case that could have supported Meta’s argument, that being the acquisition of Gyfcat by Meta’s rival Snap.
However, the tribunal did determine that for the most part, the CMA’s claims that the Giphy acquisition could be harmful to online advertising market competition were rational.
Responding to the tribunal’s decision, CMA chief executive Andrea Coscelli said: “We welcome this resounding endorsement by the Competition Appeal Tribunal of the CMA’s approach to reviewing mergers that may harm innovation.”
The CAT will determine the best course of action to take regarding the CMA’s withholding of relevant information soon and could call for a re-investigation.