If big tech companies didn’t know it yet, they do now. It’s time to take the world’s antitrust regulators as seriously as our U.S. regulators. Maybe more so.
Meta has been forced to sell Giphy, the GIF database and search engine it acquired in 2020, for around $315 million. Both Meta and Giphy are based in the US, but are enforced by regulators in the UK, not the US.
But the rest of Big Tech shouldn’t be grinning and eating popcorn like Michael Jackson in the movie theater. must. Unbreakable Kimmy SchmidtWhile this particular decision only affects Meta, it shows how other big tech acquisitions may come under scrutiny in a country whose antitrust rules aren’t as favorable to business as America’s. There is a possibility.
It’s the first time global regulators have dissolved an acquisition of a big tech company, and it almost certainly won’t be the last.
The decision came after the Competition Markets Authority (CMA), which regulates competition in the UK, ruled last November that Meta had to sell Giphy, saying it would hurt competition in both social media and display advertising. Not a big surprise. market. For display advertising, the acquisition of Meta eliminated a potential competitor, according to the CMA. Giphy had a growing advertising business that shut down when Meta acquired the company. For social media companies, Meta may deny competitors access to the most popular GIF searches and databases, or Meta user data to use his Giphy’s GIFs on their own platforms. The reason was that we may request that you provide
Meta appealed that ruling, but on Tuesday the CMA again ruled that the acquisition had to be reversed. decided to go home developmental arrestAlthough the decision comes from the UK regulator, Meta plans to sell Giphy’s global operations.
“While we are disappointed with the CMA’s decision, we accept today’s ruling as final word on this matter. We will continue to work closely with the CMA regarding the sale of Giphy,” the company said in a statement. I’m here.
Having to get rid of Giphy might not be the worst thing that could happen to Meta right now. Since 2020, things have changed. Like most companies, Meta is looking for ways to cut spending, including closing unsuccessful projects. Also, GIF is clearly dying and some see it as an outdated format used by old people. (That said, GIFs were declared “dead” some time ago — this Atlantic article is from 2012 — but they’re still alive in many places on the Internet.) After years of trying to keep Giphy, Meta may not be too bummed to lose in this particular case. GIFs aren’t used much in the metaverse anyway.
But it’s still a tipping point for Meta, who previously didn’t seem to take the CMAs too seriously. It has been fined several times for violating the CMA’s first enforcement order and failing to provide required updates to authorities. He said it was the first time he had to.
Other big tech companies should try to learn from the loss of meta. Because the world’s regulators probably don’t stop there.
Britain is one of several countries willing and able to try to curb the dominance of Silicon Valley. The US has been slow to pass antitrust laws, and regulators are limited in what they can do to enforce antitrust laws, but the European Union and the UK are leading the way. The Digital Markets Act, the EU’s massive effort to regulate Big Tech, will begin to come into force in November. Its Digital Services Act will come into force in 2024. The UK created its own unit dedicated to digital markets under her CMA two years before her, saying it would “oversee a new regulatory regime for the most powerful digital companies”. Elsewhere in the world, Australia has passed legislation forcing Meta and Google to pay publishers for content hosted by their platforms. Apple has grounded its App Store rules in some countries that have passed laws requiring them to allow third-party payment services and more.
If we see USB-C charging ports where iPhones used to have dedicated Lightning ports in 2024, it’s likely the result of the EU’s decision to mandate devices to use one common charging port.
It could also suffer the same fate as Meta and Giphy when it comes to big tech acquisitions. For example, Microsoft’s massive acquisition of Activision is currently being investigated by the CMA. Failure is not guaranteed: The CMA has approved recent acquisitions of other big tech companies, such as Meta’s purchase of Kustomer, and EU competition authorities have approved Amazon’s purchase of MGM.
Attempts to pass big tech-focused antitrust laws in the United States have largely stalled and are not expected to pass this session, but their enforcement agencies have made it clear that antitrust laws The Federal Trade Commission is seeking to force Meta to sell Instagram and WhatsApp in one lawsuit, and virtual reality app development in another. trying to prevent a takeover.
After announcing its decision to terminate its contract with Giphy, Meta has made it clear that it will not stop acquiring companies. “We will continue to evaluate opportunities, including acquisitions, to bring innovation and choice to more people in the UK and around the world,” the company said in a statement.
We’ll see if Meta still has the same desire to gobble up smaller competitors, and if so, how hard people in the UK and around the world will resist.