For all the talk of forcing a Facebook breakup, no antitrust regulator has actually brought the hammer down on the company, which recently changed its name to Meta. Until now, that is.
On Tuesday, the U.K.’s Competition and Markets Authority (CMA) ordered Meta to sell Giphy, the library for GIFs and video clips that Facebook acquired in May 2020, for a reported $400 million. At the time, Facebook said the acquisition would help make conversations in Instagram and its stablemates more entertaining.
However, according to the CMA, the deal has “already removed Giphy as a potential challenger” to Meta in the display advertising market, and leaving Giphy in the tech giant’s hands “will also allow Facebook to increase its significant market power in social media even further, through controlling competitors’ access to Giphy GIFs.”
“By requiring Facebook to sell Giphy, we are protecting millions of social media users and promoting competition and innovation in digital advertising,” said the CMA’s chief investigator on the case, Stuart McIntosh, in a statement. The regulator said back in August that Facebook/Meta controls around half of the U.K.’s display advertising market.
Meta is reportedly considering an appeal, but it ought not to be surprised at the severity of the CMA’s crackdown. Just last month, the regulator fined Meta $67 million for deliberately refusing to comply with the terms of an order, issued by the CMA at the start of the investigation, that was supposed to stop the companies merging while the deal was being investigated. It was the first time any company had done this, and the authority was livid.
Previous attempts to split up Meta
The British regulator’s move comes at a time when many influential voices are calling for a Meta disbandment.
Last December in the U.S., the Federal Trade Commission (FTC) sued to force Facebook to sell Instagram and/or WhatsApp, over antitrust concerns. A federal judge dismissed the suit in June, saying prosecutors hadn’t demonstrated Facebook controlled over 60% of the social networking market, but the FTC revived its suit in August, with more detail on that front.
Meanwhile, the European Union’s lawmakers are in the process of developing a bill called the Digital Markets Act, which would update the bloc’s antitrust rules for the age of Big Tech. As it currently stands, the law could block the likes of Meta from making “killer acquisitions” that could limit competition.
Germany already moved forward, at the start of this year, with new rules designed to prevent the biggest tech firms from abusing their market-dominating positions. This was a big deal in the antitrust world, because competition law generally aims to fix problems after they appear. In the current landscape, where tech firms take over markets at speed, that approach may be on its way out.
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