Hey, remember how Meta acquired the GIF platform GIPHY in 2020, then didn’t do much with the app and hasn’t really changed or integrated it since?
That is, at least in part, because Meta acquisition of GIPHY Has been challenged in the UKWhich has delayed the full scope of its planning for the GIF platform.
As part of a broader distrust push, The UK’s competition regulator has asked Meta to close its IP 315 million acquisition of GIPHY, citing concerns that the deal would “significantly reduce competition” in the UK display advertising market.
Which, of course, the GIPHY we’re talking about seems a bit out of place – but obviously, a lawsuit has to be answered, like this week, in a UK court. Meter has dismissed the latest appeal against the legal actionWhich puts the acquisition of GIPHY on volatile ground again.
As reported The Financial Times:
“The [UK] The Competition Appeals Tribunal on Tuesday unanimously rejected all but one of the grounds for the meter appeal, concluding that the competition and market authorities decided last year that it would sell GIPHY – the largest supplier of animated images known as GIF. Social communication. “
The key issue in the lawsuit against the acquisition of Meta is the use of GIFs for advertising, which could expand Meta’s hold on the digital advertising market.
GIPHY’s advertising options are fairly limited, but it has in the past facilitated brand promotion through GIF, which, under the meter, could become a global offer, Can Become a more important component of larger digital advertising. It’s not something that could possibly be another social media app or a similar scale, but Meta has the potential to expand its ad market presence, and it is seemingly reasonable enough to block integration based on this latest search, further progress.
The appeal against the meta-lawsuit will continue, but its options are becoming more limited, which, in the end, may force it to sell GIPHY, or remove the app from the UK market, if it is an option that will follow.
How exactly this can work, however, is complex, since the problem is with the overall acquisition, which is not just about the UK, but about all markets. But UK courts cannot rule worldwide. Basically, legal technicality, in this sense, goes beyond my comprehension of international law, but it seems that there may be other ways to follow the meta, before it has to look at fully reversing the agreement.
In some ways, this sounds more like an anti-meta position than an anti-competition – especially when you consider that in 2020 Snapchat was allowed to acquire the rival GIF platform Gfycat. The argument is that GIFs could create more significant advertising content, but Meta’s previous acquisitions turned WhatsApp and Instagram into huge, influential platforms in their respective sectors, with Meta buying any platform and how it could expand its already significant market dominance. There is a level of concern about that.
Digital advertising UK accounts for 66% of total advertising costs, Meta and Google are taking most of that advertising dollar. Given this, you can understand why UK regulators are reluctant to leave more power to US tech giants in this regard. And while GIPHY can never form a significant part of that overall ad pie, it does in some ways feel like a sandy moment line for local competition.
Which means the full integration of GIPHY’s Meta has stalled, and we have no real way to know what it plans to do or what it can do with the app until the legal challenge is resolved.
That means there’s no new GIF tool on your favorite social media app – and when it’s all sorted out, maybe nobody cares about GIFs, because we’ll all fly in metaverse, become cartoonish avatars. More popular options for expression.
Maybe, then, Meta should just give it back and save money, even though we don’t know the full plan for the acquisition, or the associated costs if it is to go in the opposite direction in the end.
We are now waiting for the next update of the legal process.
