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Facebook-parent Meta plans to sell off Giphy, an online search tool for animated images, after the UK government said it would force the tech giant to unwind its acquisition of the service.
It’s the first time regulators have successfully broken up a part of the technology giant since Meta’s economic dominance began drawing antitrust scrutiny from officials around the globe.
The final decision on Tuesday by the UK Competition and Markets Authority (CMA) ends a drawn-out fight with Meta over the deal’s likely impact on rivals’ access to GIFs, as well on as the digital advertising market.
Meta had gone to court to defend the deal, but UK officials largely prevailed this summer, when a tribunal upheld the CMA’s finding that the Giphy acquisition could potentially reduce competition by eliminating a competitor in online ads and by restricting third-party access to Giphy’s GIF library.
In a statement Tuesday, Meta said it would accept the UK’s decision as “the final word on the matter.”
“We will work closely with the CMA on divesting GIPHY,” a company spokesperson said. “We are grateful to the GIPHY team during this uncertain time for their business, and wish them every success.”
Meta added it would continue exploring acquisitions, despite the defeat.
For years, critics have accused the tech industry’s biggest players of seeking out “killer acquisitions” of smaller companies. The acquisitions, they said, could entrench the larger players’ dominance by cutting off potential competition.
In the United States, the alleged “buy-or-bury” strategy is at the center of a federal lawsuit aimed at forcing Meta to spin off WhatsApp and Instagram. The breakup attempt by the Federal Trade Commission could go to trial in 2024.
The FTC has also sued to block Meta’s acquisition of a virtual reality technology company known as Within Unlimited, arguing that the deal could give Meta further power to establish a “virtual reality empire.”
Meta is fighting both lawsuits.