Facebook parent company Meta filed a complaint with the UK that the order to sell GIPHY, a GIF company, was unreasonable

According to IT House, the British government antitrust agency recently ruled that the US social networking giant Meta (Facebook's parent company) must sell giphy, a GIF platform company it previously acquired. Meta recently filed a complaint, saying that the regulator's evidence does not support the conclusion that the acquisition poses a threat to competitors and may affect market competition in the online advertising industry.

In May 2020, Meta bought Giphy for $400 million, but last month, the Uk antitrust agency Competition Markets Agency ordered Meta to sell the company on the grounds that some of the acquisition remedies proposed by Meta would not address the UK government's concerns about market monopolies.

This is the first time in the history of the UK's Competitive Market Agency to block a major M&A deal in the Internet industry, which also sends a signal that the BRITISH government's attitude towards regulating big tech companies has changed.

In response, a Meta spokesperson said today that the company has filed a complaint against the decision of the Competitive Market Bureau and will seek to completely repeal the order to sell the company.

The spokesman said it was wrong for the UK to block the takeover deal, both legally and on factual grounds, and the relevant evidence did not support the conclusions or measures of the UK Competitive Market Agency.

Giphy's platform reportedly has massive GIFs, and half of that traffic comes from Three of Meta's established social tools, Facebook, Instagram and WhatsApp.

In addition, the company's GIFs are also very popular on other social platforms, including the short video platform TikTok, twitter websites, and Snapchat, a post-reading chat tool. The UK's Competitive Market Agency is concerned that Meta's acquisition of Giphy may prevent social network competitors from accessing GIF resources or force rivals to provide more user data.

Meta explained that after the completion of the acquisition, it will not change the content of the agreement for social platform opponents to access GIF resources, and will not collect more user data than in the past because of accessing GIFs. In fact, these GIFs do not have the function or mechanism of monitoring user behavior habits like traditional cookies and other files.

To alleviate concerns, Meta proposed a number of legally binding remedies, which were rejected by the Competitive Markets Bureau as they would result in continued monitoring of user behavior.

Another concern of the UK government is that Meta has shut down Giphy's new online advertising business after the acquisition is completed, which is equivalent to eliminating potential competitors for Meta's huge advertising business.

Meta said that Giphy's online advertising business is not successful, and if it becomes a market-dominant player in the current business model, other GIF providers in the industry will naturally replicate Giphy's business model. Therefore, this acquisition transaction did not meet the conditions of the so-called "serious damage to market competition", which is an important basis for the British Competitive Market Agency to reject the transaction.