Facebook’s parent company, Meta, was in court on Monday to try to overturn a British competition policeman’s (CMA) decision asking it to abandon its merger with GIF specialist, Internet short animation, Giphy.
Meta appealed a four-day trial to the London Competition Appeal Tribunal. The decision does not have to be given at the conclusion of the hearing and may also be subject to appeal.
The CMA estimated in November that this acquisition in May 2020 for 315 million US dollars (402 million Canadian dollars) and Facebook’s share threatened to hurt the sale of online advertisements as well as social network users. That’s why he asked the social media giant to sell Giphy.
One month investigation
After an in -depth investigation that lasted nine months and led the CMA to review more than 280,000 internal Meta and Giphy documents, the regulator said it feared the acquisition would favor Facebook’s already dominant market position in online advertising and compared to others social networks.
This merger combined Meta’s significant market power […] in Giphy’s position as primary provider of GIF in the United Kingdom, the CMA said on Monday in a statement sent to Agence France-Presse (AFP).
By requiring Meta to sell Giphy, we encourage competition and innovation in digital advertising and ensure that competing social networks gain competitive access to Giphy’s services.he added.
The giant resists
Meta argued on Monday morning that the British regulator had not expressed concerns over the competition being demanded, saying in a statement that the decision to block the deal (to buy Giphy) was wrong in law and in fact.
Despite many documents reviewed, the CMA could not find one that showed Meta viewed Giphy as a threatening competitor in the online advertising market at the time of the merger, attorney Daniel Jowell argued at the hearing.
He also pointed out that the platform has not received any other company’s purchase offer, which he said shows that its growth prospects are not necessarily expected as stellar.
For Meta, this acquisition is specifically a way of integrating Giphy’s immense library with its Instagram social network.
Founded in 2013 and based in New York, Giphy is one of the leading GIF sharing platforms, claiming over 700 million daily users.
Source: Radio-Canada