The British watchdog CMA should not have forced Meta to sell poison platform Giphy. The judge finds that CMA’s investigation was flawed. The watchdog now has to take another look at the investigation and the decision. Meta had appealed the forced sale.
It Competition Appeal Tribunal overturns the UK Competition and Markets Authority’s decision to force Meta to sell Giphy. CMA stated that the acquisition reduces competition between social media platforms and that the acquisition would prevent Giphy from becoming a competitor in the advertising market.
According to the authority, Giphy was planning to allow companies to advertise on its platform, which could have made Giphy a competitor of Meta. That plan was put on hold with the takeover. In addition, Meta was able to restrict access to Giphy for competitors and favor its own platforms. As a result, platforms could be forced to hand over more user data to Meta upon Giphy implementation. Blocking the takeover was the only way to prevent the problems, according to CMA.
According to Bloomberg the Competition Appeal Tribunal had reservations about the approach to CMA. The watchdog is said to have incorrectly consulted certain parts and used certain research findings on incorrect grounds or painted them black. Therefore, the tribunal overturns CMA’s decision, in agreement with CMA and Meta.
The watchdog now says it is reconsidering its decision to sell Giphy. CMA expects to issue a new verdict within three months. Meta announced in 2020 that it wants to buy Giphy, probably for around 400 million euros.