If Big Tech didn’t already know it, it now knows it’s time to take global antitrust regulators as seriously as they do American ones. Maybe even more.
Meta was forced to sell Giphy, the GIF database and search engine it had acquired. back in 2020 about $315 million. And it’s being enforced by regulators in the United Kingdom, not the United States, even though both Meta and Giphy are based in the US.
But the rest of Big Tech shouldn’t be sitting smiling and eating popcorn like Michael Jackson in a movie theater. They should read the decision on their computer screens and look worried. like titus in Unbreakable Kimmy Schmidt. Because while this particular decision only affects Meta, it could be indicative of how other Big Tech acquisitions fare under the scrutiny of countries whose antitrust rules aren’t as business-friendly as they are in America.
It notes first time the global regulator has canceled the acquisition of Big Tech, and this is almost a sure sign that it will not be the last.
This decision is not a big surprise as the Competition and Markets Authority (CMA), which regulates competition in the UK, has ruled last November that Meta would have to sell Giphy, saying it would hurt competition in both the social media and display advertising markets. In terms of display advertising, the CMA stated that the Meta purchase eliminated a potential competitor as Giphy had a growing advertising business that Meta closed when it bought the company. For social networks, the reason was that Meta could deny its competitors access to one of the most popular GIF search and databases, or that it could require them to provide Meta user data in order to use Giphy GIFs on their own platforms.
Meta appealed the decision, but on Tuesday the CMA ruled again that the acquisition should be cancelled. This time the Meta decided to take the ball and go home like George Michael Bluth sad walk home on retarded development. While the decision comes from the UK regulator, Meta will sell Giphy’s global operations.
“We are disappointed with the CMA’s decision but take today’s decision as the final word on the matter. We will work closely with CMA on the sale of Giphy,” the company said in a statement.
Having to get rid of Giphy may not be the worst thing that could happen to Meta at the moment. Everything has changed since 2020. Like most companies, Meta is looking for ways to cut costs, including Shutdown projects that don’t go well. Apparently there are gifs. them path outside, and some consider them to be an obsolete format used by obsolete people. (However, GIF was declared “dead” some time ago – this Atlantic article dates back to 2012 – but it’s still alive in many corners of the internet.) While Meta doesn’t like being told what to do and fought the UK for years trying to keep Giphy, Meta may not be too devastated by the loss in this particular case. In any case, GIFs don’t have much of a place in the metaverse.
But it’s still a watershed moment for Meta, which hasn’t taken CMA seriously before. He was fined several once for violating the CMA’s original executive order and failing to provide the authorities with the necessary updates. CMA said it was the first time it had to fine a company for willfully refusing to provide required information.
Other big tech companies should try to learn from Meta’s losses because global regulators likely won’t stop there.
The UK is one of several countries that have the will and the ability to curb the dominance of Silicon Valley. While the United States has been slow to enact antitrust laws and its regulators are limited in their ability to enforce antitrust laws, the European Union and the UK have taken the lead. Big EU efforts to regulate big tech, Digital Markets Lawstarts to take effect In November. His Digital Services Law comes into force in 2024. The UK has created its own dedicated block for digital markets under the CMA two years ago, which he said “will oversee a new regulatory regime for the most influential digital companies.” Elsewhere in the world, Australia has passed legislation requiring Meta and Google to pay publishers for content hosted on their platforms, and both companies pay. Apple has conceded its rules in the App Store a little countries which has passed laws to allow things like third-party payment services.
If you see a USB-C charging port on your iPhone in 2024 instead of a proprietary Lightning port, well, that’s probably the result. EU decision Require devices to share one common charging port.
And when it comes to Big Tech acquisitions, some of them may well suffer the same fate as Meta and Giphy. Major acquisition of Microsoft Activision now being investigated CMA for example. Failure Not Guaranteed: CMA Approves Other Recent Big Tech Acquisitions Like Meta purchase Kustomer, and the EU competition authority signed an agreement with Amazon. purchase from MGM.
While efforts in the US to pass big technology-focused antitrust legislation have largely stalled and are not expected to be passed this session, US law enforcement agencies are making efforts to pursue large technology acquisitions that they believe they are violating antitrust laws. The Federal Trade Commission is trying to get Meta to sell Instagram and WhatsApp in the same lawsuit and is trying to block the acquisition of the VR app developer. to another.
After announcing its decision to terminate the deal with Giphy, Meta made sure to note that it would not stop acquiring companies. “We will continue to evaluate opportunities, including through acquisitions, to bring innovation and choice to more people in the UK and around the world,” the company said in a statement.
Let’s see if the Meta still has the same appetite for absorbing smaller competitors – and if so, how strongly people in the UK and around the world are going to fight back.