A British tribunal that hears appeals of decisions by the U.K.’s main regulator of competition overthrew that agency’s rejection of Facebook parent Meta’s purchase of Giphy on the narrowest of grounds — and the deal could still face further scrutiny by regulators, Reuters reported Tuesday (June 14).
Meta acquired Giphy, an animated image platform, for a reported $400 million. In 2021, the British Competition and Markets Authority (CMA) ordered Meta to sell Giphy, stating that the purchase threatened to harm competition in advertising and also could hurt rival social media companies.
Meta appealed to the Competition Appeal Tribunal (CAT), which may review decisions by the CMA.
While the CAT concluded, based on a technical matter, that the CMA had erred in ordering Meta to sell Giphy, it also agreed with the CMA that the deal could stifle competition, Reuters reported.
Meta had appealed on six additional grounds, other than the technical matter, and the CAT sided with the government against Meta on all six.
According to Reuters, Meta and the CMA issued dueling victory statements after the rulings were announced.
CMA Chief Executive Andrea Coscelli said the CAT had issued a “resounding endorsement” of the authority’s approach to assessing acquisitions.
“Innovation is a vital part of the competitive process, particularly in digital markets,” Coscelli said. “We also welcome the tribunal’s endorsement of the ‘care and careful consideration’ given to this issue by the independent Inquiry Group in this case.”
A Meta spokesman said, “Today’s ruling found that the CMA’s approach to its investigation was ‘difficult to defend’ and ‘undermines the entirety of the decision.’”
“We firmly believe our investment would enhance Giphy’s product for the millions of people, businesses, and partners who use it,” the Meta spokesman said, according to Reuters.
The CAT could send the case back to the CMA with instructions that it reinvestigate the sale, Reuters reported. The authority then, according to an unnamed source quoted by Reuters, could address the technical matter at issue, which had to do in part with document-sharing, and then either approve the deal or reject it again.