Meta's Giphy buy could be back on after watchdog agrees to reboot investigation

The UK's Competition Market Authority has confirmed it is taking another look at its decision ordering Meta to sell Giphy. This comes after a tribunal in London politely suggested the regulator and Facebook's parent bang their heads together and figure out a way forward after the authority made a technical error.

The CMA on Monday said it is reevaluating its case against Meta, and has set out [PDF] a remittal process, during which it will gather more evidence on whether Meta's acquisition of Giphy is anticompetitive for online advertisers and social networks. This review should be done by mid-October, we're told.

It appears the watchdog is still leaning toward rejecting Meta's takeover of Giphy, though it said it is open to further comment from the public as well as the businesses involved by Friday, July 29.

Meta's Facebook snapped up GIF warehouse Giphy in 2020. The CMA, however, blocked Facebook from integrating Giphy's technology after probing the deal. The regulator concluded Facebook would have an unfair advantage over its rivals if the acquisition was approved, and ordered the US giant to sell Giphy. 

Meta appealed the decision at the Competition Appeal Tribunal, and just about lost its case when the panel mostly sided with the CMA. The biz did, however, win on one point. The tribunal noted the CMA's decision was "procedurally flawed and otherwise unlawful" because it failed to disclose that Facebook competitor Snap also tried to buy Giphy but ended up acquiring one its rivals, Gfycat, instead.

The CMA said it held back that information for confidentiality reasons. By leaving it out, the CMA deprived Meta of vital evidence in its case and put it at an unfair disadvantage, according to the appeal panel.

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"We have concluded that the CMA has failed properly to consult and has wrongly excised portions from the decision," the appeal judgment [PDF] stated.

"We say no more about the remedy that should be ordered, if any. We invite the parties to consider what consequential orders should be made and – more particularly – to identify how and when the question of remittal can be determined. We consider that this needs to be resolved sooner rather than later."

Which is a very British way of saying: my dear CMA, would it not be a frightfully good idea to take another look at that little letter you sent to the Americans scolding them about that animated cat website, and consider whether or not you would reword it or just simply forget the whole thing, eh?

The regulator took the hint.

"We have agreed to reconsider our decision in light of this finding," a spokesperson for the CMA told us last night. "We will commence our review shortly and will seek to complete the remittal within three months of today's order."

Meta declined to comment on the record. ®