However, this concern forms only half of the argument of the CMA. While warning of reduced competition among social media platforms, the regulator simultaneously warned of its impact on a market that did not yet exist. The CMA says Giphy has the potential to compete with Facebook in the UK advertising market if it hasn’t been acquired. The watchdog said in a statement: “Prior to the merger, Giphy launched innovative advertising services that it was considering expanding to countries outside the US, including the UK. ,” the watchdog said in a statement, citing GIFs Pepsi and Dunkin’ Donuts created to promote their brands.
“This is an interesting bit, given that the CMA’s objective for a settlement involving two US firms is,” said Peter Broadhurst, a competition partner at law firm Crowell & Moring. expansionism”. “Giphy hasn’t generated any revenue in the UK,” he said. “But the CMA found evidence, not particularly strong evidence as it sounds, that it may have tried to sell advertising in the UK at some point in the future, and they feel ‘that’s enough for us.'” Pepper says the UK regulator, emboldened by Brexit, is poised to assert itself on the global antitrust stage. we had an unusual regime that gave the CMA a range of powers to intervene in many transactions, and it used those powers, especially after Brexit, to accommodate smaller transactions.”
This decision is also not a complete surprise. The CMA has been conducting an in-depth investigation into the Giphy acquisition since April 2021. In September 2021, Facebook responded to the interim investigation by questioning British jurisdiction. for agreement in a document published by the UK government. The truth, in the present case, is very simple. “Facebook and Giphy do not compete in the United Kingdom, and there is no overlap in relevant commercial activity that raises competition concerns.”
Tyler believes Meta is currently facing a growing trend in which mergers are being flagged by countries with which the deal has no significant connection, Tyler believes. She added that the European Union and its member states are also starting to look at transactions that take place far beyond their borders, pointing to Austria’s introduction of the acquisition of customer service platform Kustomer. of Meta for the European Commission in March 2021. “The United States is having a difficult time enforcing against mergers and possible, as a result, many other enforcement agencies are looking at how they can get it. can keep market harm from happening,” Tyler said.
For a regulator in one country to block a deal where the companies involved originate in another country is unusual but not unprecedented. In 2001, the European Union blocked a proposal to buy Honeywell from Boston-based General Electric. In 2018, a Chinese review dismissed US semiconductor company Qualcomm’s plan to devour Dutch rival NXP. In May 2021, aeronautical software companies Saber and Farelogix failed in their appeal against the CMA’s decision to block their merger, even though Farelogix had no customers or revenue in UK.
