Meta Platforms sold Giphy to Shutterstock on Tuesday for $53 million. This is the last step to undo the deal that was stopped by British regulators, who didn’t want the Facebook owner to buy the GIF-sharing platform because it would hurt competition.
The stock image service said it is paying cash for Giphy, which has 1.7 billion daily users and partners like Facebook, Instagram, WhatsApp, TikTok, and Twitter. Shutterstock said it had signed a deal to give Meta access to Giphy’s material on all of Meta’s platforms. Giphy is based in New York.
In a statement, CEO Paul Hennessy said that the acquisition will help Shutterstock grow its audience “beyond primarily professional marketing and advertising use cases” and “into casual conversations.”
The deal, which is set to close next month, could cause Meta to lose a lot of money.
The tweet below verifies the news:
In 2020, Meta bought Giphy in a move that was said to be worth $400 million. Britain’s Competition and Markets Authority started an antitrust review because they were worried that it would lead to a “substantial lessening of competition” in the U.K. market for GIFs, which are short looping videos. People who use the internet often use them to send texts or post on social media.
The country’s watchdog for fair business practices told Meta to end the deal in 2021. Meta tried to appeal, but it was turned down. The U.K. watchdog said that “the only way to avoid the significant impact the deal would have on competition” is for Meta to sell Giphy to a buyer who has been approved.
Meta wouldn’t say anything else about Shutterstock’s purchase on Tuesday. Instead, it pointed The Associated Press to a statement it made in October in which it said it was disappointed by the U.K.’s decision but accepted it as the “final word on the matter.”
In the same statement, Meta said that it would “continue to look for ways to bring innovation and choice to more people in the UK and around the world, including through acquisitions.”
The U.K. watchdog found that Meta’s purchase of Giphy would hurt social media users and marketers by reducing competition for animated images. Later, the watchdog came to the conclusion that the deal would bring more people to sites run by Meta while denying or limiting access to Giphy GIFs for other websites.
It also found that the deal would take away a possible competitor in the U.K.’s $7.9 billion display advertising market, half of which is controlled by Meta.
When the CMA stopped Meta from buying Giphy, it was the first time that a U.K. body had tried to stop a tech deal. But the move set a standard for how the British government should regulate other parts of the business.
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Last month, CMA stopped Microsoft from buying video game company Activision Blizzard for $69 billion. They did this because they were worried that the deal would make it harder for famous games like Call of Duty to compete in the fast-growing cloud gaming market.
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