Sensex jumps 658 points in early trade

Facebook owner Meta
started its appeal on Monday against Britain’s ruling that it must sell Giphy, arguing the fact that rival Snap offered far
less to buy the animated-images provider undermined the
rationale used to block the deal.

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Britain’s Competition and Markets Authority (CMA) last year
ordered Meta to sell Giphy, which it had acquired in 2020.

It said the deal removed a potential competitor in display
advertising, based on the possibility that Giphy’s fledgling
ads, or “paid alignment”, business could become substantial.

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The deal could also enable the Facebook, Instagram and
Whatsapp owner to restrict competitors’ access to GIFs, it said.

The ruling – the first block of a major digital acquisition
by the British regulator – signalled a step change in the
scrutiny of “big tech”.

On day one of a four-day hearing at the Competition Appeal
Tribunal, Meta’s lawyer Daniel Jowell said the CMA had withheld
for 14 months the fact that Meta’s rival Snap had made
an informal offer to buy Giphy, valuing it internally at $142
million.

That was less than half the $315 million offered by Meta.

Snap’s low valuation indicated that, like Meta, it believed
Giphy’s ads business did not have real potential, he said.

Jowell said the CMA did not ask Snap if it had attributed
any value to Giphy’s ad business – a procedural failure in
itself – but it was clear it was “not the motivation for Snap in
having an interest in purchasing Giphy”.

Snap later acquired Gfycat, a competitor to Giphy.

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Jowell said Giphy’s revenue in the United States was less
than 0.05% of Meta’s ad revenue – “literally minuscule” – while
Giphy sold no ads in Britain or elsewhere.

A Meta spokesperson said the information made public on
Monday backed its argument that the deal promoted competition
and improved choice.

“The decision to block the deal is wrong on the law and the
facts, and the evidence does not support the CMA’s conclusions
or remedy,” the spokesperson said.

The CMA said it would defend its decision “vigorously”.

“This merger combined Meta’s significant market power in
display advertising and social media with Giphy’s position as a
leading provider of free GIFs and GIF stickers in the UK,” a
spokesperson said.

“By requiring Meta to sell Giphy, we are promoting
competition and innovation in digital advertising and ensuring
rival social media providers can get competitive access to
Giphy’s services – for the benefit of UK consumers.”

The post Meta fights to overturn UK order to sell Giphy appeared first on India Express Online.