Facebook’s parent company Meta is being forced by UK regulators to sell gif-sharing tool Giphy, which it purchased in May 2020.

The United Kingdom’s Competition and Markets Authority ruled that that Meta’s purchase of Giphy was anticompetitive and “could allow Meta to limit other social media platforms’ access to GIFs, making those sites less attractive to users and less competitive.”

The deal was also found to have “removed Giphy as a potential challenger in the UK display advertising market, preventing UK businesses from benefiting from innovation in this market.”

Following its review, the CMA concluded Meta would be able to increase its already significant market power by:

  • denying or limiting other social media platforms’ access to Giphy GIFs, thereby pushing people to Meta-owned sites, which already make up 73% of user time spent on social media in the UK, or
  • changing the terms of access – for example, it could require Giphy customers, such as TikTok, Twitter and Snapchat, to provide more data from UK users in order to access Giphy GIFs

The CMA started investigating the deal in June 2020, further buoyed by a 2021 Bloomberg report which claimed Giphy artificially deflated its own value prior to the buyout in order to dodge anticompetition scrutiny.

CMA published its original decision on this case in November 2021, ordering Meta to sell Giphy.

Meta subsequently appealed that decision to the Competition Appeal Tribunal, who upheld it in July.

Meta seem to have finally given in.

“We are disappointed by the CMA’s decision but accept today’s ruling as the final word on the matter,” the company said in a statement.

“We will work closely with the CMA on divesting GIPHY.”