Paul Sandle

LONDON, (Reuters) – Meta, the Facebook owner is appealing Britain’s decision that Giphy must be sold. Meta claims that there is no evidence to support that Giphy is a threat or that this deal could affect competition in display advertising.

The Competition and Markets Authority in Britain ordered Meta (which it bought for $400m last month) to sell Giphy. This was after the CMA decided that none of the U.S. companies’ remedies were satisfactory.

This was the first attempt by the British regulator to block a large digital acquisition. It also signaled a shift in the regulatory scrutiny of big tech companies.

Meta spokesperson stated that the company appealed Giphy’s decision by the CMA and would seek a stay on the CMA order to divest. 

“The CMA is incorrect on both the law and the facts. There are no supporting evidence to support its conclusions and remedy.”

Meta’s platforms Facebook, Instagram and WhatsApp account for half of the traffic to Giphy’s vast library of looping video clips.

GIFs of it are popular among users of TikTok and Twitter (NYSE:) as well as Snapchat. CMA worried that Meta may limit user access to their data or force competitors to share more.

Meta claimed it would not modify the terms for access by competitors nor gather additional data via the use GIFs. GIFs do not have any online tracking mechanisms, such as cookies or pixels.

CMA rejected Meta’s offer to legally make the remedy binding. This was partly because ongoing monitoring would be required.

Meta closed Giphy’s advertising company, which was removing an opportunity for competition.

Meta stated that Giphy’s advertisement business had failed and it could have the potential to be a major rival. Meta also said any GIF provider could replicate its model. According to it, the agreement did not meet the criteria of “substantial lessons of competition”, which is required for the CMA’s blocking.