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Meta Is Selling Giphy. It Doesn't Have Much Choice

A UK regulator orders Meta to sell the company to guarantee all social media sites equal access to gifs.

Giphy logo in front of Meta logo
Giphy and Meta must part ways.
Nikolas Kokovlis/NurPhoto via Getty Images

Meta will sell Giphy, the online gif database it bought in May 2020 for $400 million, the company said on Tuesday. It was given little choice in the matter, after being ordered by the UK competition watchdog to offload the company.

Following a lengthy consultation process, the Competition and Markets Authority issued a final report on Meta's acquisition of Giphy on Tuesday, in which it said the purchase would limit access to gifs by other social media entities, making rival platforms less attractive to users. Meta might either deny other platforms access to Giphy or force them to share more personal data about their UK users in exchange for access to Giphy gifs, the agency concluded. 

The CMA was also concerned that the merger had removed Giphy as a potential challenger to Meta in the display ad market, even though it acknowledged this was not the company's intention when buying the database. If Meta was allowed to hang on to Giphy, it would allow the company to further increase its substantial market power in social media, said Stuart McIntosh, chair of the CMA's independent inquiry group. "The only way this can be addressed is by the sale of Giphy."

Meta has bought up all sorts of tech companies to pad out the Facebook extended universe -- Instagram, WhatsApp, Oculus, to name but a few. But it's less common for the tech giant to sell any off. In this case, its hand was forced. Meta confirmed shortly after the CMA published its decision that it would sell Giphy and would not appeal the decision.

"We are disappointed by the CMA's decision but accept today's ruling as the final word on the matter," said a spokesman for the company. "We will work closely with the CMA on divesting Giphy." In its decision, the CMA stipulated that Giphy must now be purchased by an approved buyer.

The Meta spokesperson said the company was grateful to the Giphy team throughout the period of uncertainty and wished them all the best in the future. "We will continue to evaluate opportunities -- including through acquisition -- to bring innovation and choice to more people in the UK and around the world," he said.